# How to Calculate Sponsor’s ROI so that Your Event is More Successful

17/09/2020

Event Organizer world (EO) is a part of the attractive and profitable business fields if managed properly. And it is undeniable that the sponsorship component is one of the crucial components and is expected to be of mutualism for your EO business activists. However, branding your event to attract viewers or participants, and to bring benefits to you and your sponsor is not easy. There are several things that must be considered in the various components that make up your event to run smoothly, one of which is how to calculate ROI (Return on Investment).

You have to make a budget for the various needs related to an event you want to hold. If your budget seems big enough, the sponsor will think twice, because usually sponsors tend to weigh their expenses against the event you are going to make. And there is a possibility that the sponsor will “run” from your event due to budgetary problems.

Therefore, you have to prove through the budget report submitted to the sponsor that it is expected to bring a high ROI value. According to the 2017 Eventbrite Survey, 40% of 45 event sponsorship professionals state that measuring and evaluating the value of sponsorship ROI is one of the two biggest challenges in an event

## Know the ROI Ratio in Measuring Sponsor’s ROI

The sponsor usually has its own ROI calculation (sponsorship ROI) to be used as a basis for consideration of the ROI predictions that you provide as an EO activist. There are sponsors who are open to discussing and reconciling your ROI with the sponsors themselves, others are not. Sponsors tend to want an ROI ratio of 2: 1, 3: 1, or even 4: 1.

What does this ratio mean? If your budget makes the sponsor has to pay around \$5,000 for the same nominal value of profits \$5,000, then you can say your ROI against the sponsor is 0. If the ratio is 2: 1, then the sponsor pays \$5,000, you must provide a profit of \$10,000.

## Determining the Right Steps to Plan and How to Calculate Sponsor’s ROI

Each sponsor clearly wants even more than an agreed baseline ROI ratio. The next question, what steps should be taken?

## a. Pay attention to details of assets used and costs in the event

Before you can measure ROI, you must know the value of the assets that will be purchased from sponsorship funds. Pay attention to every detail of the asset you want to use. That means you also have to calculate and consider accurately and carefully the budget incurred to get the asset requirements. And of course, the assets that you invest from sponsorship funds are expected to attract more customers than your target market.

## b. Make a Prediction of the Profits You Will Receive on Your Event

Create a report containing predicted profit from your event activities. For example, you can estimate how many visitors or customers will attend and buy sponsored products. Data from social media or web traffic that you have created specifically related to your event is very useful. You can also use software lcs2 to increase prospect results on ROI.

## c. Start Entering ROI Calculation

The next step is to include the ROI ratio in your partnership plan with the sponsor. After the sponsor approves the ROI ratio that you are proposing, the final step is to prepare an ROI calculation plan. Use calculation technology such as technology-based on RFID (Radio-Frequency Identification) or various other applications to integrate sales revenue from your event with sponsors. The sponsor must agree with the proposed various elements or metrics that you are planning. If you have finished all of that, then it means you are ready to start the planned event.