In finance, return on investment (ROI), the rate of profit or sometimes just return, is the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested.
As communicators, we are increasingly under the gun to demonstrate the return on investment for our work. But using ROI formulas that attempt to pin down hard financial gains may actually reduce our potential credibility and influence. There's a new language and strategy for communicators that can help us move from being messengers to managers of corporate assets.
I've never met a senior business leader who didn't want to make more money. Nor have I met one who didn't appreciate that communication breakdowns lead to mistakes, accidents, shoddy service, high costs and low productivity. Business leaders, especially CEOs, are eager to rid themselves of value-draining dips in performance that prevent them from hitting their numbers. As a communicator, if you can do four common-sense things well, you can not only help senior leaders to avoid these breakdowns, but you can also demonstrate how to maximize the power of communication for better business results.
Thanks to the Internet, businesses no longer need to outspend their competitors to outperform them on the marketing front. Small companies can go toe-to-toe with established, deep-pocketed enterprises, virtually overnight. But how? By leveraging the value a well-versed website designer brings to the table.
I once had a client, who shall remain nameless to protect the guilty, who called me one fateful day with some bad news. There had been a terrible clerical error. The US$300,000 marketing communication budget, which had taken weeks and months of planning to produce, had been submitted as a US$30,000 budget. It had been accepted as a US$30,000 budget. Someone had dropped a zero along the way, and it had been set in stone.
Is someone not telling the truth? Or, has Total Cost of Ownership (TCO) simply become a meaningless concept? And what, if anything, do customers and vendors need to know about TCO?