Sometimes leaders become so immersed in a business’s daily operations that they forget to evaluate how things are going. They have approvals to sign off on, reports to prepare, and a full schedule of strategic meetings to attend. But while the company seems to be moving along, there’s the sense that some areas could be doing better.
Perhaps marketing is taking too long to develop and launch their campaigns. The department has the budget it needs and runs a tight ship. Plus, a number of the advertising and outreach efforts have shown real promise. However, at times the department lacks focus and can’t define what makes specific campaigns and content successful.
Situations like these could reveal a need to reevaluate return on investment and restructure key performance indicators. Even if a business area has enough funds to produce fruitful outcomes, overworked and unproductive employees could become liabilities. Why waste effort on activities and projects that won’t add to your company’s ROI? Below is a list of business areas where you may need to rethink how to measure return on investment.
1. Online Content and Digital Marketing
A key component of any digital marketing strategy and plan is online content. That content might consist of social media posts, blogs, videos, and/or case studies. Many content teams and digital marketers use keyword research, social listening, and competitor content audits to generate ideas. Marketers also rely on topic suggestions from other departments and staff in areas like customer service and sales.
However, depending solely on these methods and brainstorming fueled by anecdotes makes it difficult to predict effectiveness. Without creating, posting, and promoting the content, digital marketers can’t quantify how a piece will perform. If marketers can’t forecast costs, traffic, and lead generation, it’s hard to justify why they should publish the content. Without awareness of what it takes to rank for a topic, teams won’t know how many and what kinds of online assets to create.
With predictive content ROI tools and frameworks, leaders can forecast content creation costs, organic traffic, and the number of resulting leads. Managers can also better calculate how long it will take to recoup costs and earn a return. Using a value-driven approach, content teams evaluate topics according to likely costs and organic traffic opportunities. Teams can also determine how to establish online authority on topics and outrank competitors.
2. Technology-Related Assets
IT departments are often overtasked and stretched thin. Devices and applications become outdated faster than new ones can be vetted and implemented. It’s tempting to try to keep tech assets running so IT staff don’t have to expend energy replacing them. Although it’s simpler to think of tech-related ROI in terms of initial costs and lifecycles, there are other factors to consider.
For instance, there may be hidden and extended intangible costs associated with aging equipment. Your employees might be wasting 10 minutes or more each day waiting for their laptops to boot up. Aging applications could be crashing or running slower so often that it lowers productivity and increases job dissatisfaction. An older infrastructure often means higher support and maintenance expenses. You may also experience difficulties with finding replacement parts.
Measuring technology’s ROI should include more than how much life you’ll get out of it. You have to consider the impacts of outdated hardware and apps and what equipment employees need to complete tasks effectively.
Workers may be more productive with tablets versus laptops because of increased portability. How do BYOD devices fit in, and can the business maintain network security? Factors such as ongoing maintenance needs and refresh cycles will also greatly impact ROI.
3. Employee Training and Professional Development
You hire employees because they’re skilled at something you’re not. Or the business needs more people with the knowledge and enthusiasm to sustain its growth. That said, most people don’t come into their jobs with all the expertise that’s essential for achieving efficiency and success. Employees often require some degree of initial and ongoing training and professional development to help the business produce these outcomes.
Training and professional development can have several positive impacts on employees and businesses. Some of these include an increase in productivity and morale. Workers get the sense that the company values them as individuals, and they become prepared to take on additional responsibilities.
However, conventional methods of assessing professional development’s ROI often look at training costs and net profits or benefits. These numbers are sometimes hard to tie to intangible or qualitative effects. Approaches like the Phillips ROI Methodology combine tangible and intangible indicators to measure training’s return, including boosted profits.
The approach looks at data such as employees’ reactions and perceptions of the training. It also examines what people learned and how they applied their new knowledge. Any changes that impact the business are measured according to financial performance or outcomes.
Reevaluating how your company measures ROI can reshape the work your employees do. These changes could have profound effects, even in departments that already make good use of their resources. Efficiency in terms of time spent on work activities and strategic direction and planning is bound to improve. Employees will also get more satisfaction from efforts that produce results and go somewhere.
Some of the areas to target for ROI reevaluation are those that deal with qualitative or subjective factors. Online content creation, technology use, and employee training ROI are tricky for leaders to quantify because conventional methodologies overlook intangibles. But using modified approaches that show how qualitative factors influence bottom lines will help businesses produce more holistic returns.