ROI Calculations

Return on investment (ROI) is a simple mathematical formula that does not change by company, country or function. Just divide the net benefit of something (Gain minus Cost) by the cost. Then multiply by 100%.

Too many communication consultants mistakenly talk about return on engagement, return on reputation, return on voice and similarly made-up concepts that have no meaning to business executives because they don’t involve money. It would be better in those cases to just talk about the value of those things, not “returns” from them.

How we’re different

We connect communication campaigns, or specific channels in a campaign, to the behavior changes intended as the outcome of the campaign. There is no financial value in greater awareness, higher understanding or more positive attitudes—until they lead to a behavior change.

We use a variety of techniques to make the connection depending on the content of the communication, the targeted stakeholders for the behavior change and organizational environment.

Sample Projects: ROI

Survey Questions

For PartnerRe, a reinsurance company, we conducted quantitative phone surveys with key decision-makers at their potential client companies to identify how much impact different customer communications had on a variety of outcomes, including two behaviors: calling my client to request a sales call to discuss something they read or heard about or being a tipping point in choosing to sign a six-figure contract with my client. To calculate the ROI for any one of the channels, like the customer magazine or business events, we calculated the “gain” part of the ROI formula by multiplying several numbers for a particular channel; for example, for the customer magazine:

  • The percentage from the survey of customers who said that something they read in the magazine during the last 12 months led them to call PartnerRe for a sales call to talk about a new project.
  • The number of companies on their client list receiving the magazine.
  • The percentage of sales calls that typically result in a signed contract.
  • The average annual revenue from a signed contract.

Pilot and Control Groups

Westec Security was having a problem with vehicle accidents. We implemented a new approach to safety communication in half their locations that matched the other half in terms of current accident rates and driving environments. At the end of the year, accidents went down dramatically in the pilot locations but not at all in the control groups. The $1 million savings from the reduced insurance premium alone more than paid for the program, which resulted in a positive ROI.