One of the most difficult things we face as communicators is how to prove the value of our work. The value of much that we do is subjective; it is not measurable, or at least not easily measurable. However, experience shows that more is measurable than may first appear to be the case.
A vital action for measuring the value of communication is to plan ahead to measure the results of comms activities. All too often, comms pros 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 the target audience will respond favorably. We are merely measuring inputs (distributing information to the news media) or outputs (the ensuing publicity). All this activity only measures whether journalists like what we say; it gives us no direct idea of any change of behavior by our end audience, who are our target. We have to infer this and bluster to our senior managers or 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 we should look at measuring how much communication has changed the tangible behavior of our target audience such as customers, investors or employees – and then compare the results against the costs.
Start by checking the position at the start of the campaign. This is important, but unfortunately many people fail to do this. We should check the total financial value over a given period of the factor we 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 we start the communication activity while keeping as many other variables stable – at the position they were at the start of the campaign. For example, measurement of publicity activities is destroyed if advertising takes place at the same time. It then becomes too difficult to separate and measure the impact of our 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.
The brief: major new product ready for launch.
Activity: Only PR should be used to launch the item. Media release distributed to promote new product, plus promotion in company website and Facebook, Instagram 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:
1000 – Number of calls in week of PR effort before ads start
20% – The proportion of calls that become sales
800 – Estimated number of sales from PR in first week
x $200 – Annual profit per sale of each item of product
$160,000 – Annual profit from the week of publicity
$10,000 – Salary of PR person for, say, 1 month, + cost of distributing release etc
ROI = 1600%
(Notice the very conservative amount of time provided 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 they acted in response to the PR activity:
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