Radario
5 Key Metrics for any Event Organizer
JULY 14, 2017
In the entertainment industry, organizers often face similar situations: few tickets were bought, advertising turned out to be ineffective, demand fell and, in general, something went wrong. Of course, in some cases it's due to force majeure, but the absolute majority of failures in the event organization are predictable, of course, if you systematically work with data and don't trust to chance.
It's noteworthy that machine learning is not artificial intelligence, but only a part of it. In the process of machine learning, the system can be automatically improved as new data and new experience are obtained. In this case, the algorithms (or functions) for the work are specified by the developers. These are the rules or directives that the computer follows when processing information and performing operations.
Viewers' Base
The simplest example of the viewers' base is any form of a table of contacts of your viewers and subscribers. It's noteworthy that by subscribers we mean those who are in your own database in the form of email addresses or telephones.

Despite the fact that subscribers in social networks are a weighty argument for promotion, do not forget that there is always a great risk that a social network will change something in its algorithms, and subscribers simply won't see your messages. For example, in Facebook, without an additional infusion of your advertising budget, few will see your post with an external link, and a similar algorithm works in Instagram and YouTube.
Your own contact database guarantees that you will never lose access to your audience
Therefore, your own contact database guarantees that you will never lose access to your audience. At the same time, don't regard the base of viewers as a simple list of contacts. The information about each buyer can and should be enlarged with other data, from the date of birth to transactions and interests (for simplicity, we will refer to one entry in your database as a profile). Remember the most important thing: the viewers' base is your capital, your money and your confidence in the future.
The Growth of the Viewers' Base
Contrary to the popular belief that a large number of profiles in the database is the result of a successful project, do not forget that any contact organizer had nothing at the beginning. First of all, you should have an accurate understanding of who your audience is, of its approximate size and places to look for it. It is necessary to keep statistics about the growth of your base, if not daily, then at least weekly. If its growth slows down, you must understand whether it goes according to your plan or in spite of it.

Of course, this is not the most important indicator, but for most projects this figure can serve as an excellent beacon of a disorder. Your base grew by 50-100 new viewers' profiles a week, and today it's only 10-20. Does this mean that the demand for the performance has fallen? Has advertising exhausted itself? Has a new competitor come out? Has the audience number reached its ceiling? There are many possible reasons, and we're going to look into some indicators that will help determine the reason of a problem and possible solutions to it.
1. Conversion: How Much Are You Loved? CR
Imagine a promoter handing out flyers. Suppose, only 500 out of 10,000 people passing by will take the flyer, and only 10 will take advantage of the offer. Therefore, 500/10000 * 100% = 5%. This is the proportion of people who read the advertisement. On the Internet, this indicator is called click-through rate (CTR). It allows you to assess how much attention is paid to your advertising by the chosen audience.
It is considered that if you have never done optimization of advertising on the Internet, you can increase the final conversion up to 5 times in almost any case
10/500 * 100% = 2%. This is the proportion of the people who saw the offer and "turned" (converted) into a client. This indicator on the Internet is called CR (conversion, conversion rate), it allows you to understand whether your proposal is relevant to the chosen audience. It shows the number of times the visitors of your site have made a purchase or other targeted action. More generally, the conversion is the ratio of the number of site visitors who have performed any targeted actions on it to the total number of site visitors. Both indicators radically affect the effectiveness of advertising. It is considered that if you have never been done the optimization of advertising on the Internet (selection of creatives, texts, targeting, etc.), you can increase the final conversion up to 5 times in almost any case. Let's face it: after all, it is difficult to imagine that the first time will close to the ideal, especially if you are not an expert in this matter.
As for your own sales on the Internet, the role of a promoter distributing flyers is played by a specialist who purchases Internet advertising, and the role of a passer-by is played by visitors of websites featuring the information about your event.
One of the most common mistakes made by the organizers is a too long path to buying a ticket online.
The typical wrong route for a viewer is as follows: Advertisement => (1) home page => (2) page about tickets => (3) ticket operator website

Obviously, every extra step reduces the conversion to the final sale, so it is better to have a simpler chain for maximum conversion within your own sales campaign: Advertisement => (1) the page with the purchase of an electronic ticket.

Obviously, there are a lot of ways to increase CTR and CR, but at the first stage it is necessary to understand that these are the indicators that radically affect the effectiveness of your sales. And you should make sure that every marketing affects CTR and CR positively. And you should start with the optimization of the route your potential viewer follows to buy a ticket to an event.
Example: the page of the festival OFF BY ROOTS UNITED: UNLOCK with the ticket purchase button
2. How Much Does the Viewer Cost? Attraction Price. CAC
For some reason, a fairly small number of organizers calculate the cost of selling each ticket. We've already covered this topic in our previous article.

Consider the situation: we spent 8000 USD on advertising, and received 2 thousand new purchases in return. This means that, within this advertising campaign, we spent an average of 8,000 / 2,000 = 4 USD per each purchase. This indicator on the Internet is called CAC (the price for attracting a user, customer acquisition cost).
It is important not only to ensure that the price of a new user does not exceed the amount of costs you can afford, but also to follow the dynamics of this indicator
Obviously, when you keep buying ads on a site, CAC will increase over time, which is quite natural (increasingly more users of the site find out about your event and gradually lose interest in it).

At some point, you will find out that a new user doesn't cost 4 USD anymore (as in the example), but 7-10, or even more, and you must know for sure what price is unprofitable for you. Also, this indicator allows you to rank your advertising activities according to their effectiveness, as the lower the CAC, the higher your total income.

Perhaps, many will be sceptical that it is possible to calculate the exact sum spent on attracting a buyer, since apart from online advertising, outdoor, TV advertising and other offline activities are involved in the promotion. Of course, it does change the matter, but if the main sales channel is the Internet (which is quite natural), then such costs can be considered as a means to increase the CTR, and you can evenly increase the expenses on all Internet channels. Or you can consider them separately, as the cost of those sales that were committed organically (for example, a user saw the poster, and then went to the site directly or through a search engine). In any case, this is not an excuse for not calculating the effectiveness of a particular channel through the CAC.
3. Average Basket. ARPU
Perhaps, this indicator is the most important for the event organizers. This is not only the groundwork that allows you to plan the economy of an event as a whole, but also the most important indicator for sponsors and investors, reflecting, among other things, the solvency of your audience.

Broadly speaking, ARPU (average revenue per user) is an average revenue per user within a certain period of time. In the context of an event, it is usually understood as an average revenue per visitor of an event, but we can also take into account several events within some period. It depends on the purpose of calculations and the specifics of your events.

If 1000 orders for 50 USD each are expected for our event, then, introducing an option to buy a gift (like at New Year's shows) or a T-shirt (like at a concert), you can increase the average basket, say, by 8 USD (the ARPU is already 58 USD), thus getting 8 * 1000 = 8000 USD more solely by means of providing a relevant service for the audience.

Western event organizers use myriads of tools to increase ARPU at the expense of additional services: parking, hotel, a better seat, VIP service, paid wardrobe, backstage pass, souvenir products. It depends on the possibilities of the site, but if you think what additional services will be relevant and produce an even more unforgettable impression on your viewers, why not get additional profit from this?
4. Revenue = (ARPU - CAC) * Number of tickets
You are certain to remember a lot of cases when marketing turned out to have "devoured" all the income and you have nothing to pay the staff with. Therefore, it is the systematic assessment of these indicators while planning the revenue and conducting an advertising campaign that will save you from such an uncomfortable situation and help you be in the loop.

It's also noteworthy that scrutinizing the ways to increase the average basket, you will not only increase profits, but also come up with new marketing opportunities, find out what kinds of advertising you can afford and whether you should spend money on the largest possible coverage or it will be enough just to target as thoroughly as possible number of audiences and rely on PR.
For the most accurate forecasting, use the information from your viewer database, as this is your groundwork and the guarantee of a lasting success in the entertainment industry
5. The Lifetime of the Viewer. LTV
It is typical of most organizers that their events are attended by the same spectators either regularly (theaters, sports, clubs), or periodically (festivals, concerts).

On average, a new viewer regularly attends the events for 1.5 year, visiting 8.5 events and spending 850 USD, and then their interest fades, and they give up. It is important to understand that this is an average indicator. This means that there are those who don't give up, those who attend one event, but the average indicator will still be as mentioned above. In the example, 1.5 year is the LT (lifetime) indicator, and 850 USD is LTV (lifetime value of the viewer).

This indicator (LTV) allows significantly adjusting marketing pattern. If in the context of one event we can't afford to increase the CAC higher than ARPU, then if we know the lifetime value of a viewer, then we can knowingly go to a loss, raising the CAC, but knowing that we are certain to get it back in the future.

This, in turn, is a very strong advantage, as on a market with high competition newcomers and casual players can't afford to risk and launch hard dumping, but for a serious project with a considerable background price markdown can simply be a justified part of a strategy to attract customers.
A high LTV is what any organizer should strive for
A high LTV is what any organizer should strive for. Even if it is a show that is held once a year and is supposed to be watched only once (that is, it implies a new audience), then it is quite possible that after some time viewers will return with their children or other relatives. In such a case, then the period of activity is about 5 years or more. For example, "Snow Show", which has been working successfully since 1993, with people returning to it after a long time.

It is clear that assessing the effectiveness within such long periods is rare among the event organizers. But today it's simple to accumulate a large amount data from the very beginning: it is likely that soon organizers will take into account the return of customers within 2 or 3 years.
How to Use the Data? Conclusion
If you have never optimized your work using data analysis, then we have great news for you: you can improve your efficiency by at least 2 times. But to make data work, you must do the following:

1. Start gathering data as soon as possible.

2. Correctly set goals that you want to achieve

3. Constantly work with the base

All the information above is initial, basic knowledge. Over time, you will understand which periods are to be considered for analysis, whether you need to work with the database as a whole or with its separate segments, and if you need to work with unprofitable customers. You can answer these and many other important questions only if you adjust your work with the data and work with analytics systematically.

If you only begin to work with our audience, learning its needs and demands, we recommend you to automate this process with a new Radario tool, the marketing platform. For successful cases and usage tips click the link.

You can get a quick access to our platform and experience all features here. We are also happy to answer all additional questions: hello@radario.co
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