As training consultants, we often find ourselves in discussions of ROI, that is, "Return On Investment," the idea being that there should be some demonstrable gain, from engaging our services, that exceeds their costs.
We also look at the ROI of our own business activities, for example, whether we are getting a "return" on a particular marketing strategy intended to bring in new clients.
On the one hand, contemplating ROI can be good for us, to protect against blind faith, just believing something "should" work, logically speaking. It makes sense to gauge results compared to resources spent, especially when we want to evaluate, say, different training delivery approaches, or different marketing activities for our own businesses.
But ROI is basically an accounting or arithmetical evaluation of results, and at times it can be too narrow. A recent blog post over at Copyblogger dealt with ROI at length in regard to social media, but the discussion there is equally applicable to any aspect of your business activities.
And it got me thinking about the intangible, and uncountable, nature of many "returns," whether from the training we give our clients, or from the marketing strategies we apply to our own businesses.
Benefit From Investment
Perhaps we can broaden our evaluative thinking to identify benefits. Saving money, or generating revenue, the usual "returns," are certainly benefits.
But suppose you pursued a certain marketing activity for months, or years, and you monitored both inputs (resources) and results. Then, last year, you switched to another approach, and now you are comparing the results.
It turns out that Strategy A and Strategy B both require exactly the same amount of money, and of your time, to implement. And they produce exactly the same results, perhaps the same number of projects of the same size, say.
But the new strategy, B, is less enjoyable, and more stressful. You don't put in any more time, but the time you do put in on Strategy B is not pleasant.
Wouldn't the smart thing be to go back to Strategy A? The ROI would be the same, but the BFI (Benefit From Investment) would be higher for A than for B.
Recognize Intangibles
In your own business decisions, don't dismiss these hard-to-quantify benefits (and negative outcomes). At least try to identify them, and then try to compare them systematically across different versions of key business activities. If you can list these elements for two competing strategies, and give each item a simple "thumbs up, thumbs down" rating, you can greatly improve your decision making.
In the same way, help your clients recognize all the benefits of your services. Quantify the ones you can -- time saved, costs reduced, risks averted. But if your client can see reduced stress, or greater willingness to apply existing processes, or similar patterns that can be observed, but are hard to quantify (or might not justify the effort involved), they should see the value in what you do, not just the "return." And value should be the basis for the fees you charge.
Keeping an eye on ROI will certainly help you and your clients make better decisions. Just don't get so enamored of numbers that you lose sight of valuable information about benefits derived from your actions. Assessing both quantitative and qualitative results can profoundly alter, for the better, the way you run your business.
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