As with any business decision to invest in a new initiative, the go or no go answer lies in the expected return of the endeavor. The simple way to think about expected return is 'how much I think I can make off of investing in the initiative and multiply that by what you believe the probability of success will be' and you have your expected return. Pretty simple stuff, right. If the result is anything greater than $0, this is typically considered a good business decision.
So here's how to think about the ROI for the HotelTechAwards to see if its worth entering for your company.
ROI = [(Avg. deal size) x (# of deals brought in b/c of award) x (probability of winning)] / (Cost of Entry)
So...lets use an example of Qleen Housekeeping Management (a fictional company) that is ranked 5th in the category currently.
- Average deal size = $2,000/year times 2 year avg. customer lifecycle = $4,000
- Probability of winning the category = 20%
- # of deals closed in 2018 bc of award (2018 full year) = 2 deals won
- Cost of entry into category = $199 entry fee
For avg. deal size and customer lifecycle (or # of years avg. customer uses your company) you can plug in your company's numbers. Probability of winning is an assumption you make based on looking at the competition in your category and how likely you think you are to be able to get reviews and move to the top spot in the rankings before January 31st. And # of deals closed in 2018 should you win the awards is your "how much do I think I can make by entering".
Back to the example...given these numbers the expected return for Qleen in this product category would be $1,600 or an 8x ROI. So you can see that under these circumstance if the company believes they have a 20% chance that they can get positive reviews from customers to move up to the top spot by the closing of the awards (Jan 31, 2018) then it makes sense to enter. Actually, the tipping point where there is still a positive expected return in this scenario is about a 1% chance of winning. Obviously this is an extreme case but you can see why most awards cost in the thousands of dollars to enter (because even a small amount of won business as a result creates a huge ROI) and the tipping point for making most business decisions is anything over breakeven so the case is pretty strong with very little downside (especially for the HTAs where entry starts as low as $149/product entry).