Despite what we’ve said elsewhere about the difficulty of determining ROI for PR and social media, gauging the VALUE of what you do is eminently doable, and highly recommended. You just need to do it correctly.
Follow these 7 rules and your calculations will fly with your senior leadership team:
Rule #1: Count all costs.
Calculate ROI like an accountant or CFO: Use “all in” costs. Take into account all costs, not just your paid ad spend or what your agency billed you. Factor in internal time and resources as well as any miscellaneous expenses and salaries. It’s better to be accurate and transparent than appear to be fudging your numbers.
Rule #2: Be conservative with your counts.
Always err on the downside. You don’t want to appear to be massaging numbers to make them look good, so take the low end of any estimate on the “results.” Be conservative; let senior leadership do the inflating if they desire.
Rule #3: Explain everything.
Even if it seems obvious to you as a professional communicator, it will not be as obvious to those green eyeshade guys. As professional communicators, sometimes we throw around terms that CFOs may never have heard of. So make sure you can explain your “Engagement Index” or “Quality Index” to your mother before you bring it to a meeting. And always include the explanation on any chart which includes an index.
Rule #4: Make sure the value matches the objectives and/or goals.
There is no point in demonstrating value in terms of leads if the goal was to change perceptions. Make sure that whatever value you are assigning reflects the goals of the program. And, just as important, the value you are claiming needs to be relative to the priority stakeholders or business objectives. So if saving money isn’t a priority (and, believe it or not, I’ve worked for clients where it hasn’t been) then measuring cost efficiency won’t be perceived as a value.
Rule #5: Do not try to measure a long-term strategy with short-term value.
Increasingly, social media is being dismissed as “not worth it” or seen as lacking a sufficient pay out. The problem with this way of thinking is that, done correctly, social media can build long-term value in customer relationships, trust, forgiveness, enhanced perceptions, and recruitment. None of which is measured by the number of likes, pins, or followers. If the goal is building relationships, then you need to measure that over time. If the goal is to sell stuff instantly, then social media probably isn’t your best bet.
Hint: Email has been shown to be more effective.
Rule #6: Do not use the lingo of accountants to articulate social change.
Let us be very clear about ROI: Unless you’ve done the actual math, borrowing the lingo of accountants will not help you articulate value to your senior management or board. Quite the opposite is true. If you use the term ROI improperly, you are very likely to confuse and frustrate your organizational leadership.
Rule #7: Do not fall for the ROI excuse.
Communications skeptics use “What’s the ROI?” or “What’s the dollar return we can expect?” as arguments to resist new initiatives or any sort of change. They question the true value of these programs and seek a convenient way to reject them.
If you are feeling cocky, you might reply by asking them if they know the ROI of the potted plants in the lobby, or whether they demand precise ROI analysis for their lunches with potential big clients or donors.
The point is that ROI cannot be easily calculated for many investments, but that doesn’t mean they are bad investments. So don’t automatically accept “What’s the ROI?” as a legitimate critique of a program that you propose. Be prepared for this tactic by presenting the value of your proposal in terms that are closely aligned with the social change and/or financial goals of the organization.∞
(Thanks to DIY Advice for part of the image.)
(This piece originally appeared as a paid article in the September edition of The Measurement Advisor newsletter. If you liked this article then don’t miss out on your chance to receive a FREE 30-day subscription to The Measurement Advisor. By subscribing, you receive access to ALL the articles — free and premium — that we’ve ever published. Click here for more details.)