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The 5-point ROI calculator

 

ROI

If you’re anything like me, you’ll have been paying lip service to the concept of ROI for years. I’m generally sceptical of the validity of most ROI calculations, but don’t have a credible argument for why we shouldn’t attempt them. I generally mumble something about ‘qualitative’ data and look a bit sheepish.

So in yesterday’s post on ten things to look for in a digital channel as part of a 21st century ‘beating the bounds’ visit, point 10 was about attempting a simple ROI assessment for the channel, to see whether it is worthy of further scrutiny with a view to making it more productive for the organisation. Here’s a quick suggestion for how you might attempt that.

Take three dimensions:

  1. Significance: how important is this channel to the organisation? This might relate to whether people would reasonably question its absence (e.g. a corporate website), its role in delivering important goals for the organisation, or its importance to senior management (but don’t over-egg the last one if it’s just a vanity channel).
  2. Resource: how much time and financial resource do we put – or should we be putting – into maintaining this? Just a sense of effort/cost, no hard numbers needed.
  3. Value: what does it provide us with in terms of helping to meet the goals we’ve set for it? This might be a cash saving, it could be a sustained increase in useful feedback received to a consultation, or might be the enthusiasm from colleagues for the insights they get from it – be open-minded.

For each of those dimensions, give then channel a High, Medium or Low score – it’s more important to complete the exercise than generate numbers. Be honest, be decisive.

Then apply this matrix:

Measure: High: Medium: Low:
Significance 1 point 2 points 3 points
Resource 3 points 2 points 1 point
Value 1 point 2 points 3 points

If anything scores 5 points or more, put it on a watch list of channels to be made more useful or less resource-intensive to maintain. 7 points or more? Put it top of the list. Anything score 3 points? Make a note of it for the business case next time you’re asked to demonstrate your team’s efficiency.

Finally, here’s a Google Doc version of the matrix, in case that helps (download the sheet to put in your own numbers):

 

  1. ROI Monkey strokes chin and nibbles heartily on breakfast bananas in approval of this article.

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