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Proving the value of your communication

An original article by Kim Harrison,

Author and Principal of www.cuttingedgepr.com

One of the most difficult things you face as a communicator is how to prove the value of your communication activity. The value of much that you do is subjective; it is not measurable, or at least not easily measurable. However, experience shows that more is measurable than may appear to be the case.

One of the vital actions for measuring the value of communication is to plan ahead to measure. All too often, practitioners merely jump in and measure inputs or outputs rather than outcomes (results), which are much more important.

For instance, most PR campaigns measure media coverage – the extent, the tone and the reach. However, this is somewhat pointless because actions like churning out media releases or gaining publicity don’t necessarily mean your target audience will respond favorably. You are merely measuring inputs (distributing information to the news media) or outputs (the ensuing publicity). All this activity only measures whether journalists like what you say; it gives you no direct idea of any change of behavior by your end audience, who are your target. You have to infer this and bluster to your senior managers or to your client.

Same with social media. Big numbers of ‘likes’ and lots of visitors are rather meaningless in themselves.

On the other hand, some thought in the planning stage can make the calculation of value much easier. Basically you look at measuring how much communication has changed the tangible behavior of your target audience such as customers, investors or employees – and you then compare the results against the costs.

Start by checking the position at the start of your campaign. This is important, but unfortunately many people fail to do this. You should check the total financial value over a given period of the thing you are trying to change, for instance the dollar value of sales of the product or service in question, the productivity of relevant employees, the current share price or cost of accidents, etc.

Then you start the communication activity while keeping as many other variables stable – at the position they were at the start of your campaign. For example, you don’t want advertising to start just as you engage in publicity. This becomes too difficult to isolate and measure the impact of your PR activity.

When you finish communicating, measure the total financial value of new sales, increase in share price, improved activity, reduced accidents, etc, that have resulted from your work.

Decide how much of that improvement you can justify to senior management. For example, to be conservative you might decide that you can attribute a minimum of 75% of the improvement directly to the communication efforts.

Then divide the dollar value of the improvement by the cost of communication for the period of time in question. You can impute PR staff time (and therefore salary costs) plus other costs such as equipment, materials, and external services

The result is an approximation of your ROI.

Case study

ROI of publicity in generating revenue

The brief: Major new product ready for launch.

Activity: PR should be used to launch the item. Media release distributed to promote new product, plus promotion in company website and Facebook page etc show a special toll- free number set up for the launch (this won’t be used in most media coverage, but is still useful). Switchboard operators can be instructed to record every enquiry for the new product. Ads and direct mail etc can be used, say, a week later for product launch, but use different phone numbers, web page etc.

Outcome: Number of phone calls to toll-free number can be measured; switchboard operators record calls for product before ad campaign starts.

You can calculate ROI along similar lines to this:

Number of calls in week of PR effort before ads start

1000

% of calls that become sales

20%

Estimated sales from PR in first week

800

Annual profit per sale of each item of product

x $200

Annual profit from the week of publicity

$160,000

Salary of PR person for, say, 1 month, + cost of distributing release etc

+$10,000


ROI = 1600%

(Notice the very conservative time provision for the PR person’s role. The actual cost would have been much less.)

A hefty return, indeed!

Other similar situations can be calculated by using a little thought, especially in surveying the end audience on the extent to which their actions/behavior resulted from the PR activity:

  • Survey financial analysts to ask what impact a conference call organized by PR had on their recommendations to buy, hold or sell the shares of the company
  • Survey employees to ask what extent the intranet (run by PR) has saved time, reduced errors and improved the accuracy of responses to customer queries.
  • Ask in a customer magazine or in the organizational blog/website/Facebook entry which of several services or products readers bought after first finding out about the item in that communication piece.
  • Ask employees in an internal survey how much of a factor the information provided in employee communication helped them to accomplish a particular sales goal.

About the Author

Kim Harrison is a recognized authority in the public relations and organizational communication field. His website, www.cuttingedgepr.com, provides a wealth of informative articles and resources on public relations techniques and management.

 

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