Would it accelerate your business to network more? How do you calculate the actual dollars gained from attending industry conferences, summits, trade shows, dinners, and networking receptions? Join us for a step-by-step tutorial on how to calculate the ROI on the time and money you spend attending events. We have distilled the hard and soft costs into a free, downloadable excel template that allows you to calculate your return.

1. How to Calculate Your ROI on
Networking Events
January
16,
2014

2. How
to
Calculate
Your
ROI
on
Networking
Events
What is this webinar designed to do?
• This
webinar
+
Networking
ROI
Template
=
fast
and
simple
calculation
of
return
(%)
and
value
generated
($)
• Give
you
access
to
Axial’s
downloadable
ROI
excel
template
• Go
through
the
mechanics
of
the
template
• Walk
through
the
theory
behind
the
calculations
• Take
you
through
a
start-­‐to-­‐end
calculation
with
detail
on
every
input
• Calculate
the
%
ROI
and
$
generated
on
the
time
and
money
spent
attending
events
2

3. How
to
Calculate
Your
ROI
on
Networking
Events
Who is this webinar for?
• Intermediaries:
investment
bankers,
brokers,
lawyers
and
legal
counsel,
other
advisors
• Product
Providers:
technology
platform
providers,
service
providers
• Capital
Providers:
private
equity
funds,
mezzanine
funds,
commercial
lenders,
strategic
acquirers,
family
ofXices,
direct
private
investors,
other
investors
• Company
Management:
CEOs,
CFOs,
COOs,
Finance
VPs,
Treasurers,
owners
3

4. How
to
Calculate
Your
ROI
on
Networking
Events
Leading the Webinar
Kateri
Y.
Zhu
Marketing
Manager,
Axial
Kateri
Zhu
supports
Axial’s
marketing
efforts
to
investment
bankers,
advisors,
private
equity
funds,
mezzanine
capital
providers,
strategics,
and
other
capital
providers.
Prior
to
Axial,
she
was
a
private
equity
associate
responsible
for
evaluating
and
executing
take-­‐private
transactions
at
Mill
Road
Capital.
Previously,
Kateri
worked
as
an
investment
banker
in
the
Healthcare
group
at
Morgan
Stanley
in
New
York
City.
She
holds
a
B.A.,
phi
beta
kappa,
cum
laude,
in
Political
Science
and
Economics
from
Duke
University.
4

5. How
to
Calculate
Your
ROI
on
Networking
Events
Overview: The Question
• Types
of
networking
events:
– Conferences,
summits,
tradeshows,
roundtables,
dinners,
receptions
• Exactly
how
much
is
networking,
or
the
lack
thereof,
accelerating
or
decelerating
your
business?
• How
do
you
calculate
the
actual
dollars
gained
from
attending
networking
events?
• Is
it
possible
to
quantify
the
return
on
new
contacts,
relationships,
and
interpersonal
interactions?
5

6. How
to
Calculate
Your
ROI
on
Networking
Events
Overview: The Answer
• The
answer:
– It’s
difXicult
but
it’s
certainly
possible
– We
started
by
distilling
the
hard
and
soft
elements
of
networking
costs
and
gains
into
the
calculator
• The
warning:
– A
useful
return
metric
won’t
come
without
some
care
and
thought
around
the
assumptions
• The
objective:
– Calculate
your
ROI
(%)
and
net
generated
value
($)
on
attending
networking
events
6

7. How
to
Calculate
Your
ROI
on
Networking
Events
Font Colors in the Template
• Yes,
they
mean
something
• Color
coding:
– Blue
=
input
– Black
=
calculation
• All
the
inputs
have
been
cleared
out
• This
means
that
your
job
is
to
input
your
Xigures
into
the
empty
cells
7

8. How
to
Calculate
Your
ROI
on
Networking
Events
Units in the Template
• The
template
is
formatted
to
show
units
automatically
– For
example,
type
“10000”
into
cell
C6
and
it
will
show
as
$10,000.00
– For
another
example,
type
“8”
into
cell
C8
and
it
will
show
as
8
employees
• All
the
cells
have
been
formatted,
so
you
should
not
be
using
any
units,
dollar
signs,
or
symbols
of
any
type
• This
means
that
you
should
complete
the
entire
template
with
your
number
keys,
0
through
9
8

9. How
to
Calculate
Your
ROI
on
Networking
Events
ROI defined
• If
an
investment
doesn’t
have
a
positive
ROI
or
there
are
other
opportunities
with
a
higher
ROI,
then
the
investment
should
not
be
undertaken
• Return
on
Investment:
a
performance
measure
used
to
evaluate
the
efXiciency
of
an
investment
• To
calculate:
the
beneXit
(return)
of
an
investment
is
divided
by
the
cost
of
the
investment
ROI
=
(Gain
from
Investment
–
Cost
of
Investment)
Cost
of
Investment
• The
result
is
expressed
as
a
percentage
or
ratio
9

10. How
to
Calculate
Your
ROI
on
Networking
Events
Gameplan
1. Estimate
the
cost
of
investment
2. Estimate
the
gain
from
investment
3. Put
it
together
10

11. Estimating the Cost

12. How
to
Calculate
Your
ROI
on
Networking
Events
Step 1: Upfront Costs
• Determine:
– The
upfront,
cash
costs
– Input
the
registration
costs
and
sponsorship
fees,
if
any,
involved
with
snagging
a
seat
at
the
table
• Example:
– Adam
Johnson,
investment
banker
at
XYZ
Advisors
– Attending
a
healthcare
industry
conference
– Goal
is
to
connect
with
past
clients
and
meet
new
ones
– Sending
3
employees
to
San
Francisco
to
represent
the
Xirm
and
paid
$635
each,
upfront,
for
registration
– Also
paying
$2,750
to
sponsor
the
conference
12

13. How
to
Calculate
Your
ROI
on
Networking
Events
Step 2: Travel, Rooming, and Entertaining
• Determine:
– Number
of
employees
attending
– Expenditures
on
air
or
ground
travel,
hotel
rooms,
and
meals,
drinks,
and
entertaining
on
a
per-­‐employee
basis
• Example:
– Expect
to
spend
~$570
on
a
round
trip
Xlight
for
each
employee
– Reserve
each
employee
a
hotel
room
for
$285
per
night
– Note
that
conference
is
providing
breakfast/lunch
and
budget:
• ~$130
per
person
for
dinner
after
the
conference
• ~$25
per
person
for
breakfast
meetings
the
next
morning
• ~$40
per
person
for
lunch
meetings
before
the
return
Xlight
13

14. How
to
Calculate
Your
ROI
on
Networking
Events
Step 3: Preparation Hours
• Determine:
– Number
of
hours
each
employee
took
to
prepare
for
the
event
• Example:
– Scheduled
a
2.5
hour
planning
meeting
three
weeks
prior
to
conference
– Expect
each
employee
to
spend
~5.0
hours
on
the
phone
and
in
email
scheduling
meetings
for
the
conference
– Expect
each
employee
to
spend
~6.0
hours
preparing
materials
in
the
week
leading
up
to
the
conference
– Scheduled
a
1.0
hour
check-­‐in
meeting
the
day
before
the
conference
14

15. How
to
Calculate
Your
ROI
on
Networking
Events
Step 4: Attendance Hours
• Count
only
hours
during
which
your
team
members
would
be
otherwise
working
• Why?
Because
the
opportunity
cost
will
be
calculated
based
on
salary,
reXlecting
work
hours
only
• Determine:
– Number
of
hours
that
each
employee
spent
in
transit
or
attendance
which
they
would
have
otherwise
spent
in
ofXice
• Example:
– 5
hour
redeye
Xlight
+
2.5
hours
commuting
to
and
from
airport
• Counts
for
0
hours
since
team
members
would
have
otherwise
been
at
home
– 8
hours
at
conference
– 3.5
hours
at
an
apres-­‐conference
dinner
meeting
with
client
– 1
hour
breakfast
meeting
the
next
morning
– 3
hours
of
ad-­‐hoc
meetings
with
people
met
at
the
conference
– 1.5
hours
in
a
lunch
meeting
– 5
hours
on
a
Xlight
back
from
west
coast
+
2.5
hours
commuting
15

16. How
to
Calculate
Your
ROI
on
Networking
Events
Step 5: Employee Cost per Hour
• This
number
represents
the
cost
of
every
hour
each
of
your
employees
spends
preparing
for,
traveling
to,
and
attending
the
event
• Determine:
– Average
cost
of
each
hour
of
employee
time
• Example:
– Assume
average
salary
of
$100k,
49
working
weeks
per
year
(52
weeks
with
3
weeks
of
vacation),
5
days
per
week,
8
hours
per
day
Attendee
=
$100,000
annual
salary
=
$51
per
hour,
Cost/hour
49
weeks/year
x
5
days/week
x
8
hours/day
per
Attendee
16

17. How
to
Calculate
Your
ROI
on
Networking
Events
Total Costs
• Finally,
add
upfront
event
costs,
costs
of
attendance,
and
costs
of
preparation
to
calculate
your
total
networking
costs
17

18. Estimating the Gain

19. How
to
Calculate
Your
ROI
on
Networking
Events
Word of Warning
• Calculating
the
value
generated
is
a
more
challenging
and
sophisticated
exercise
than
calculating
the
cost
• To
help
structure
the
calculation,
we’ve
laid
out
four
ways
to
approximate
gain
• This
is
the
harder
part
– Takes
more
care
and
thought
to
calculate
accurately
• Goal
is
to
quantify
the
$’s
gained
from
networking
• Four
sample
ways
to
approximate
the
gain:
– Investment
banker
– Financial
sponsor
– Company
– Service
provider
• Not
exhaustive,
but
puts
numbers
against
interpersonal
interactions
19

20. How
to
Calculate
Your
ROI
on
Networking
Events
Step 7: Number of Interactions at Event
• Determine:
– What
your
interaction
of
value
is
when
it
comes
to
networking
– For
most
of
you
this
will
be
#
meetings;
however
it
may
be
#
conversations,
#
new
business
cards
collected,
or
another
interaction
type
– The
number
of
interactions
you
expect
at
this
event
• Example:
– Banker
Adam
Johnson
from
XYZ
Advisors
sets
up
11
meetings
for
the
conference
and
5
meetings
for
the
following
day
20

21. How
to
Calculate
Your
ROI
on
Networking
Events
Step 8: # Interactions Needed to Compete
• Investment
bankers
often
attend
events
to
meet
with
past
clients
and
make
connections
with
new
ones
• For
many
advisors,
if
they
can
stand
out
at
a
conference
and
follow
up
effectively,
their
chances
of
closing
on
a
new
client
go
up
meaningfully
• Determine:
– The
metric
of
greatest
relevance
to
business
performance
– The
number
of
interactions
needed
to
make
your
desired
outcome
possible,
e.g.,
in
the
example
below,
Adam
is
rarely
in
the
running
for
a
deal
mandate
when
he’s
had
less
than
3
meetings
with
the
potential
client
• This
is
often
called
a
“full
cycle”
both
in
sales
and
Xinance
• Example:
– Advisory
business
performance
is
often
driven
by
#
of
transactions,
or
deals,
advised
per
year
– Historically,
Adam
has
found
that
he
needs
to
meet
with
a
client
3
times,
on
average,
in
order
to
be
considered
for
a
deal
(i.e.,
mandated
to
represent
the
client)
21

22. How
to
Calculate
Your
ROI
on
Networking
Events
Step 9: Win Rate
• Determine:
– The
probability
that
you’ll
achieve
the
desired
outcome
(e.g.,
win
a
mandate,
contract,
investment,
etc.)
assuming
a
“full
cycle”
– This
will
be
a
percentage
of
total
full
cycles
completed
• Example:
– Historically,
Adam
has
found
that
of
the
potential
clients
with
whom
he
goes
through
a
full
pitching
cycle
(in
this
case,
3
meetings),
he’ll
win
the
mandate
1
out
of
12
times
– This
means
that
Adam’s
probability
weighted
meetings
per
mandate
is
36.0
meetings
22

23. How
to
Calculate
Your
ROI
on
Networking
Events
Step 10: Value Generated per Win
• Determine:
– The
average
amount
that
your
business
takes
away
from
a
successful
“win”;
this
refers
to
the
mandated
deal,
the
executed
contract,
the
closed
deal,
the
signed
LOI,
etc.
– This
will
be
a
$
• Example:
– Across
all
the
transactions
on
which
Adam
advises,
his
average
advisory
fee
is
$120,000
23

24. How
to
Calculate
Your
ROI
on
Networking
Events
Total Value Generated
24

25. How
to
Calculate
Your
ROI
on
Networking
Events
Example: Financial Sponsor
• For
many
private
equity
funds,
a
major
milestone
in
the
deal
process
is
signing
an
LOI,
or
letter
of
intent
• Fund
Partner
Ben
O’Sullivan
from
ABC
Capital
expects
12
1-­‐on-­‐1
interactions
at
the
upcoming
deal
professional
summit
• Historically,
he
has
found
that
it
takes
him
9
management
meetings
to
properly
diligence
an
investment
• Of
those
investment
opportunities
for
which
he’s
worked
through
9
meetings,
he’ll
ultimately
sign
for
and
win
only
1
of
every
8
deals,
or
12.5%
• Thus
his
weighted
average
meetings
per
deal
is
72
meetings
(9
÷
12.5%)
• His
average
return
on
investment,
once
exited,
is
$2.0
million
• In
the
Template,
under
Step
3,
link
Total
Generated
Value
(cell
I7)
to
Total
Generated
Value
under
Step
2
(cell
F36)
25

26. How
to
Calculate
Your
ROI
on
Networking
Events
The Endgame
• ROI
=
(Total
Gain
–
Total
Cost)/Total
Cost
• Net
Gain
=
Total
Gain
-­‐
Cost
26

27. How
to
Calculate
Your
ROI
on
Networking
Events
The Endgame
• ROI
=
(Total
Gain
–
Total
Cost)/Total
Cost
• Net
Gain
=
Total
Gain
-­‐
Cost
27