THE INITIALISM ROI appears regularly in industry articles and is widely used by meeting planners and suppliers alike, yet there is confusion around the true meaning of the term. Many use the term ROI to mean cost savings or cost avoidance, while others use it interchangeably with the word benefits.

But the true definition for ROI is earnings or net income divided by the investment. It is best expressed as a formula: The ROI percentage equals meeting benefits minus meeting costs, divided by meeting costs, times 100.

ROI (%) = meeting benefits - meeting costs/meeting costs × 100

Determining the monetary benefits of the meeting is the most difficult part of this. But it can be accomplished through careful planning, data collection, and analysis.

In the 1970s, Jack J. Phillips, PhD, first developed an ROI methodology. Today, more than 2,000 organizations worldwide are using a refined version of this methodology in areas from human resources to performance improvement — and it's now being used to calculate the return on investment of meetings and events. The Phillips ROI Methodology utilizes five levels of evaluation, all which are essential in determining the return on investment.

  • Level 1, Reaction and Planned Action — measures attendee satisfaction. Almost all organizations evaluate at Level 1, usually with a generic, end-of-meeting questionnaire. While important as a stakeholder satisfaction measure, a favorable reaction does not ensure that attendees have acquired new skills, knowledge, opinions, attitudes, or professional contacts.

  • Level 2, Learning — focuses on what attendees learned during the meeting using tests, skill practices, role-plays, simulations, group evaluations, and other assessment tools. It helps to ensure that attendees have absorbed the meeting material and know how to use it properly, but a positive measure at this level is no guarantee that what was learned will be used on the job.

  • Level 3, Job Applications — Numerous methods can be used to determine if attendees applied on the job what they learned from the meeting content or professional contacts made at the meeting. The frequency and use of skills are important measures at Level 3. While a good gauge of the meeting's success, it still does not guarantee that there will be a positive business impact for the organization or the attendee.

  • Level 4, Business Results — focuses on the results achieved by attendees as they successfully apply what they learned from meeting material, messages, or contacts. Typical Level 4 measures include output, sales, quality, costs, time, and customer satisfaction. But there can still be a concern that the meeting cost too much.

  • Level 5, Return on Investment — this ultimate level of measurement compares the monetary benefits from the meeting with the fully loaded meeting costs as expressed in the ROI formula.

The data should show a chain of impact through the levels as the skills and knowledge learned (Level 2) are applied on the job (Level 3) to produce business results (Level 4).

However, it is not appropriate to conduct a Phillips ROI study on all types of meetings. Only 5 percent to 10 percent of your meetings and events should even be taken to ROI. The best meetings for an ROI study would be linked to the operational goals and/or strategic objectives of the organization and would incur significant costs and staff/participant time. Typical financial or insurance meetings that might benefit from ROI include agent or broker training meetings, incentive travel programs, and corporate marketing events.

Monica Myhill, CMP, is president of Meeting Returns, a Littleton, Co. company that provides return-on-investment impact and evaluation studies for meetings and events. For more information contact her at (303) 220-1920 or