Finding the Right ROI Model for Your Client


Since time immemorial, we have always questioned weights and measures. In the Mesopotamian marketplace, the consumer needed to fear cheaper grains were mixed into their satchels to increase weight. In the early 1900s, you had to watch the clerk in the general store for fear a thumb or finger might weight the scale against the consumer. Unfortunately, the PR industry has had its own forms of chicanery when it comes to measuring the effectiveness of our work.

Tackling the Inherent Challenges of Metrics
As I see it, there are two problems with the way public relations practitioners handle measurement: the lack of a common industry standard, and a disconnect between what many of our colleagues view as success and what our clients actually understand success to be.

When you look at the landscape of measurement in our industry, you can see a range from practitioners who count media clippings to those who track message effectiveness.

The clip counters are the folks who prepare fancy monthly reports, chock full of glossy magazine and newspaper cuttings, broadcast transcripts and blog reprints. These results are usually quantified in reports that will summarize and emphasize the number of clips and may calculate the advertising equivalency of those clips. It will typically sum up some ridiculously high number—in some cases, a quadruple multiple of what it would have cost for the same bundle had the client bought the space in advertising dollars. Putting these reports together took a fair amount of manpower and resources—all of which the client paid for.

In the nearly two decades I plied our trade with top five agencies, I was encouraged to use message tracking offerings, where vendors would analyze media coverage and make a determination of whether the client’s characteristics were present in the stories and to what extent these themes would bubble up.

As with the clip counters, the measurement aficionados spent significant client dollars preparing wonderful-looking reports, full of pie charts, colorful graphics and compelling stats.

But what both camps lack is any real connection with what the vast array of what our clients are looking for—return on investment (ROI)—not only to justify the expense of publications, but to validate the expenditure as a viable tool in its marketing and strategic arsenal.

Making ROI the Driver
It seems so simple. Help the client understand how their public relations dollars are being spent and what their ROI is on those dollars. Yet, why is it so hard for us as an industry to scrap the publicity-by-the-pound theory or the veiled attempt to use fuzzy math to track messaging and somehow make a leap that because the client message was in a story a consumer actually bought something?

ROI is an easy metric. Did more consumers come into a client’s store to purchase something because they saw an article or broadcast piece? Did a client see more click-throughs to their e-commerce site from a blog posting or Twitter message?

What we practice in our agency is just that—tracking our effectiveness by whether we are achieving a pre-determined ROI for the client. There are some simple steps we follow to determine what ROI model is right for the client:

o    Set specific objectives: This sounds easy, but needs to clearly identify what the client is really looking to achieve from the specific program. When they tell you things like name recognition or more customers, ask them to be specific. For example, what type of customer? Is it a new demographic or a subcategory of existing clients? If they want more recognition, then why? Are they going to expand into a new product category or are they seeking merger/acquisition partners?
o    Talk to the right client contact: Sometimes the client’s PR director or even the marketing manager may not be fully sensitive to the company’s real ROI objective. In your initial due diligence meetings with the client, make sure that you are asking senior management to identify these ROI objectives.
o    Don’t be afraid to talk about ROI. In too many cases, public relations practitioners are afraid to have an ROI discussion because they either don’t understand the client’s industry or they don’t want to be held to a measurement for fear they will fail. First, I have found clients are thrilled and appreciate having the discussion. It shows your understanding of their real objectives and that you want to learn about their business model. Second, I believe if you don’t have the discussion the likelihood of failure is greater because you and the client may be gauging program effectiveness differently.
o    Make sure the right agency contact is having the discussion: The ROI discussion should not be led by your junior- or mid-level people. While these staffers should be conversant in ROI and understand its importance, in many instances, they lack the business knowledge or gravitas to dialogue openly with the client or challenge some of their assumptions or answers.
o    Make sure your team understands performance objectives: When you get back from that meeting, sit down with your team and make sure they all understand what the ROI objective is. The program you develop should be singularly focused on helping the client achieve this benchmark.
o    Monitor ROI: When you place a client on The Today Show, ask him what the tangible result was a day or two afterward. Did he see more sales, did the company Web site traffic spike, etc.? What if it didn’t? That’s OK, too, if you have a real partnership with your client. Most clients are savvy enough to understand not every tactic they employ will be a home run. Yet, if you are talking with them, you and your team can better understand what works and what does not. You can alter your program to focus on the more successful avenues of effectiveness.

A common question about the concept of tracking ROI is how you do it for any client other than a consumer product company. The answer is very simple: Every company is selling something. Likewise, so is the not-for-profit or trade association. They are looking for new members, new funding sources, etc.

Although it’s clearly important to narrow the communications gap with clients, I do not want us as an industry to forget that we really should have a common standard for tracking success.

Hospitals, for example, track patient outcomes, while airlines track on-time performance. Department stores track sales and returns of merchandise. Our industry needs to create a standard so we can help not only our clients better understand the value of public relations, but also that we can track whether we are really making measurable impact for our clients.

This article appears in PR News Guide to Best Practices in PR Measurement, Volume 4. Stan Steinreich operates his own firm, Steinreich Communications, an international public relations firm with client services including media relations, investor and community relations, philanthropy, employee relations and crisis communications. To find out how to order the guidebook, go to www.prnewsonline.com/store.




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