This article first appeared on PR Daily in October, 2015.
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 have to do it right.
Follow these seven steps, and your calculations will resonate with your top executives:
1. Count all costs.
Calculate ROI as an accountant or CFO would: Use "all in" costs. Take into account all costs, not just your paid ad spending or what your agency billed you. Factor in internal time and resources, as well as any miscellaneous expenses and, of course, salaries. It's better to be accurate and transparent than appear to be fudging your numbers.
2. Be conservative with your counting.
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 leaders do the inflating if they want to.
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. 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. Always include that explanation on any chart that has an index.
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. Just as important, the value you are claiming must be relevant to the priority stakeholders or business objectives. So if saving money isn't a priority (and I've worked for clients for whom it hasn't been), then measuring cost efficiency won't be perceived as a value.
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5. Don't 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 payout. The problem with this 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 "likes," pins or follows. If the goal is building relationships, then you should 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 in that regard.)
6. Don't use the lingo of accountants to articulate social change.
Unless you've done the 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 organization's leaders.
7. Don't fall for the "ROI" excuse.
Communications skeptics use "What's the ROI?" or "What's the dollar return we can expect?" as ways to resist new campaigns 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 whether they know the ROI of the potted plants in the lobby, or whether they demand precise ROI analyses 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.
A version of this article first appeared on Paine Publishing.