ROI vs ROX vs ROO - a brief explanation

For years, everyone has been hyper-focused on Return on Investment, determined to show that every role, action or project is pulling its weight. With an ever-increasing pressure on budgets, it’s understandable that stakeholders want to scrutinise every penny spent within an organisation. If you can’t prove a return on investment, it’s easy to cut projects such as internal events because everyone thinks they show no quantifiable worth. This is not, however, true. You can show a quantifiable worth – you just can’t show it fiscally.

What you need to do is change the lens of what you’re measuring, shifting your perspective away from direct revenue and towards better engagement, which is measurable in attrition, performance, customer satisfaction scores and ultimately profit. It’s not as simple a calculation, nor is it a quick measure - it requires time to embed and evaluate against previous measures.

So, how do you prove the value of an event when the objective is not monetary? You bring in ROX (Return on Experience) and ROO (Return on Objectives).

This article is a simple explanation of these terms, what they mean and how to use them to re-frame your conversations with stakeholders. It runs alongside our recent “OMG! The first crucial step in events planning” article. Make sure you check that one out too as it goes into a lot more detail about setting your objectives, measures and gains. After all, if you don’t have specified objectives, you will never be able to prove you have met them.

ROI (Return on Investment)

In its simplest form, revenue-based ROI is a performance measure used to evaluate the profitability of an investment. As long as you have clearly defined monetary objectives, with tangible and quantifiable numbers to work with – such as taking orders at an exhibition – there is a simple calculation.

Gross profit from event – Cost of event

________________________________ x 100 = ROI

Cost of event

So, imagine you take ￡300K in orders at an exhibition and the total cost of exhibiting was ￡100K

￡300K (gross profit) - ￡100K (cost of event)

___________________________________ x 100 = ￡200K (or 200% ROI)

￡100K (cost of event)

Obviously, this is somewhat simplistic. The way organisations calculate costs varies considerably. Do you include the cost of time spent by staff? Do you include a percentage cost of existing resources? And so on.

Of course, you don’t have figures like this for an internal event. And the results you are looking for are sustained and longer term. This is when you need to look at ROX or ROO. These are both softer, non-sales measures that prove the impact of an event or activity when it is not possible to tie them directly to sales. They look at changes in employee and/or customer satisfaction and behaviours, what has been achieved and whether an event has achieved its business objectives. Again, these objectives do need to be clearly specified beforehand.

ROX (Return on Experience)

This is where the fun starts. Whereas ROI is all about measuring quantifiable facts, ROX is more like measuring the magic. ROX is a holistic approach to understanding and increasing the value of your investments across customer experience (CX), employee experience (EX) and leadership experience (LX).

Technically, there are methods to calculate ROX but, similarly to ROI, they are only easily measurable against external, CX opportunities. However, the important difference here is this: While ROI is a simple metric that allows you to directly measure cost against value generated, ROX is much more intangible, and calculating it will force you to consider a number of factors across your product, services, marketing campaigns and even internal company policies.

What was it about the event that really spoke to people and how did it made them feel? These are the qualitative elements such as mind shift, inspiration and personal enrichment. Measuring them is a bit like knitting fog. It’s catching and keeping hold of something intangible but ultra powerful. What you want from an event is for every attendee to come away excited, challenged, engaged. Ready to put into practice everything they have learned.

To measure ROX, you need to know how people felt before the event and how they feel afterwards. How satisfied were they with the event overall? What have they learned and how have their attitudes changed? What do they intend to do with that new-found knowledge? There are many ways to gather this sort of information, from on-the-spot feedback throughout the day to end-of-event questionnaires and follow ups in the following days. We have a great many examples of the type of questions you could ask, how to ask them and when. Simply drop us a DM or give us a call and we’d be delighted to share them with you.

ROO (Return on Objectives)

Whatever people say they intend to do immediately after an event, you will only know the extent of change and its effect on the business further down the line. ROO is not an immediate metric and it is often based on an estimate of the perceived overall change. This may sound a bit woolly but it’s important to know this stuff. Did the event lead to significant behaviour change? What were those changes? How have new skills or knowledge been applied? Have they led to lasting organisational or personal transformation?

You could be looking at better staff retention, customer retention, increased orders, stronger online presence, greater trust in your organisation. Yet again, we are back to OMG.

In order to measure any return from an event – return on investment, experience or objectives – you must have set clear objectives right back at the beginning. We cannot stress this enough. It has to be the very first step in any event plan. Always.

simply better

experts in creating a return

Every event we create is designed to inspire, excite and provide long-lasting, tangible returns. To find out more about what makes a really great, memorable event, check out our resources page for a wealth of ideas and innovations. Or call us for a chat about your next event and see how we can help you show a significant return on investment, experience and objectives.