Calculating return on investment for your content strategy (podcast)
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In episode 56 of the Content Strategy Experts Podcast, Gretyl Kinsey and Alan Pringle discuss how to calculate return on investment for your content strategy even if you’ve never measured anything before.
Gretyl Kinsey: Welcome to the Content Strategy Experts podcast brought to you by Scriptorium. Since 1997, Scriptorium has helped companies manage, structure, organize, and distribute content in an efficient way. In episode 56, we talk about return on investment and how you can calculate it even if you’ve never measured anything before. Hello and welcome to the Content Strategy Experts podcast. I’m Gretyl Kinsey,
Alan Pringle: And I’m Alan Pringle.
GK: And today we’re going to be talking about return on investment or ROI. And I want to just get started with a little bit of context first. So when you’re coming up with your content strategy, why is it so important to make sure that you calculate ROI and be able to show that?
AP: Generally, because the people that have the money want to know what they’re going to be getting for their money, that’s your return on investment.
GK: Absolutely. And what are some of the typical kinds of pieces of information that go into coming up with that number?
AP: Well, one way to kind of look at that is when you’re looking at your content strategy and you’re doing your analysis of your current situation, what’s messed up, what’s not working, where are the inefficiencies? A lot of the numbers and ideas in regard to ROI can come from there. Those are your pain points. If you fix them, what goodness are you going to get from that? And that’s kind of one way to look at where to start to look for those kinds of numbers.
GK: Absolutely. I know that when I’ve interviewed different people at companies whether they’re writers or whether it’s executives or anybody else with a stake in the content, they all kind of have different pain points and so every piece of information that you can get from those different people in those different groups can kind of give you a better understanding of what that overall ROI might be.
AP: And I think it’s important to note too, some people’s pain points trump other people’s pain points. If an executive, and especially someone who has the money that can fund your project really wants problem B to get worked out but you’re more concerned at problem A, you might want to take a look at your perspective and realize in order to get the money you may need to focus on what the exec sees as the problem as part of your analysis work on your content strategy.
GK: Absolutely, and I think that’s especially important if you’ve got pain points maybe that are in conflict with each other from different groups. Then when you’re looking at it from that ROI perspective and thinking, “Which pain points are costing us the most?” Then that kind of clearly shows you which one might be the most important one to consider when it comes to fixing those.
GK: I want to talk a little bit more about that kind of conflict and maybe some roadblocks that can come into play when you’re trying to figure out your ROI and one that I want to talk about is lack of metrics. There have been several organizations actually that I’ve worked with where this has been an issue. And one, in particular, that was kind of a pain point they mentioned was they had not been gathering any sort of metrics on things like how much time writers were spending on formatting versus content creation. How much time users were spending searching for content and not being able to find it, both internal and external users. And those were some good numbers that could’ve been used to calculate ROI, but they didn’t have any of that.
GK: So what they had to kind of do to prove it and sell it more to executives was start with a small scale pilot and go up and then with that pilot they could say, “Okay, now, here, we’re finally collecting some metrics that can prove our ROI.” So I wanted to get your take. Have you seen similar situations? And what other things can be done besides maybe a small pilot project to make up for that lack of metrics if you’re trying to get numbers and you just don’t have anything so far?
AP: Unfortunately, content people, content creators, often are not good with numbers. Yes, it’s a bit of a generalization, borderline on a stereotype, but there is truth to that. So sometimes you’re going to have to really take a step back and before you maybe start looking into, “I need money for this,” really starting to figure out those numbers. Now, getting them is often not an easy thing to do. You mentioned a really good one. If you can get funding for a small pilot and then extrapolate from that, that’s one way. But another way to do it too is maybe do some research on industry averages. There’re certain things that are fairly true consistent across the board in regard to fields like technical communication. When people in tech comm are using desktop publishing tools, often you were looking at 25 to 50% of a full-time content creators time as being working on the formatting, not actually creating the content but formatting.
AP: Now, there are ways to get those numbers down templatizing, et cetera, but, in general, say 25% so with that metric in mind, take a look at the average cost of a, for example, technical communicator, and I’m talking about the loaded cost. And when I say that that is the overall costs, including all compensation, vacation, whatever else it’s called, “a loaded cost.” And if you know or can find out, probably from someone a little higher up the food chain, what that loaded cost is, and you say take even a more conservative, 10 to 15% of that time as being for formatting, you’re going to have an idea of how much it costs for one person a year to work on say formatting on their content.
AP: And if you go in the direction of a content strategy where you’re trying to automate formatting with smarter structured content, you are going to really eliminate that 10 to 15% of whatever number that is for every single person who’s creating content. So if you kind of methodically go through from starting with, “This is what it costs to employ someone for a year, what percentage of their time is doing spent on x and y tasks?” And if you reduce the time of your content strategy to do x and y, you can pinpoint fairly well what you’re going to save per person.
GK: Absolutely. I think it’s really good to note that even if you don’t have hard numbers that you’ve been calculating and that you’ve been collecting metrics on, industry averages can still give you at least some kind of an estimate to start with. And it doesn’t even have to just be with things like the time spent formatting. It can be on other things like localization.
AP: Oh, anything.
GK: You can kind of get some idea of reuse just as-
AP: Copying and pasting.
GK: … copying and pasting.
AP: That’s a really good one.
GK: So there are all sorts of ways that you can just look at averages and kind of use that to help calculate your ROI at least close. And I think as Alan said, if you do a conservative estimate, you could even make the case that this is sort of what we think it might be the lowest cost savings scenario but you could be saving a whole lot more if the metrics that you actually end up collecting later show that we were wasting more time than you thought.
AP: You really always want to go with the conservative estimates because what you don’t want to do is over promise and under deliver. You want to do the opposite. You want to say, “This is a very conservative estimate and look at how much we’re gaining just with this conservative view on this.” It’s a lot more compelling and frankly safer for you to do it that way.
GK: I want to talk a little bit about another issue now that might kind of impede you from getting the numbers that you need and that is organizational issues. And we kind of touched on one a little bit when we talked about are there may be some aspects that are in conflict with each other, but there could be situations like an acquisition or merger that might make it really hard to collect some of the numbers and the metrics that you need across the organization. There could be things like company reorganizations, there might be kind of drama or political issues amongst departments. So there are all sorts of things kind of organizationally that might make it difficult to get those numbers. So what would you recommend when you’re faced with a situation like that to make sure that you get all the information that you need?
AP: This is where I think face-to-face communication is really, really important. It may be time to have an all-hands meeting in one location. I’m talking face-to-face. If you have to have some people come in because of time zones or conflicts or whatever, come in via a web conference it’s okay, but it’s not ideal. I think if you’re running into those problems, getting everybody in a room, talking face to face and figuring out what possible … I’m trying to find the right word here. What misconception are people having about someone else’s work that’s causing these problems? Where are the conflicts coming from? Getting everybody together face-to-face to talk about what they perceive and then maybe try to get everyone kind of to a level playing field about their understanding of the problems.
AP: It sounds ridiculous, but talk it out. I mean we laugh here at Scriptorium a lot of times when we call ourselves content therapists because we get caught in these political battles and have to smooth things out a lot of times by being the middle person, the intermediary. But I do think the really the best way to solve these problems is to talk face-to-face. And I know it sounds facile, and it sounds ridiculous, but it can actually work.
GK: Yes. And I’ve seen it work multiple times with organizations in these kinds of conflicts or with these kinds of situations that a lot of times what was causing those kinds of misunderstandings in the first place was just people not talking. So when you’re coming up with a new strategy and everyone really needs to get onboard and work together, just bringing them into a room together and kind of explaining what’s so important really helps push past a lot of those issues.
AP: And it can help to have a third party in there. Hire a consultant to maybe help you with that, to come in there. And I’m not saying be the referee in a brawl, that’s not what I’m getting at, although I’ve seen some meetings that came close. To basically, help people think outside their own boxes because when you have someone else asking the questions, it can help you focus in a way than if it’s just people off in the company there.
GK: Absolutely. And I think that’s especially important if, for example, a content strategy initiative is being led by one department. And so that department’s manager is the one kind of gathering everything. They may not have the ability that a consultant would have to really get honest numbers from everybody if there are kind of conflicts going on. Whereas if you have a third party outside perspective than people might be a little more willing, to be honest, and to kind of give up their information and their numbers. And it also kind of takes the pressure off of you as that manager trying to put your strategy in place. If you’ve got someone backing you up and kind of helping you collect all the information that you need to prove your case, then that can really get you that ROI that you need.
AP: And it’s important to build trust because when you start talking about what is the average loaded cost for an employee, you’re starting to talk about what people are getting paid. And that can be a rather prickly issue to deal with. So there has to be a level of trust and respect among all the people who are working on the content strategy analysis to understand and really not weaponize that information. They need to use it for good and they need to be careful about how they handle that information and to be respectful of sensitive information when you are dealing with numbers like that.
GK: Absolutely. So when you’re in a situation where you might be working with bad or incomplete data, what do you think is the best way that you can kind of estimate the ROI, whether you’re dealing with lack of metrics or organizational issues or both?
AP: We touched on it a little bit earlier, but see if you can do some research on industry averages, that’s one way to start having that kind of baseline information and you can kind of compare yourself, “Does this really apply to us or not?” That can help maybe spark some ideas about what you need to do to better gather the information that’s a little more specific to your particular case.
GK: Yeah, and I think that can also be a starting point for if you’re not collecting the metrics you need, start now. Look at what you are missing and say, “Okay, as part of our strategy we need to go ahead and start gathering these numbers,” even if we haven’t been historically, we can at least kind of start establishing a baseline right now and say, “Okay, even just starting this week, this is how much time our writers are spending doing this task versus this other task. This is how much we’re spending on localization and how much time it’s taking the content to get back to us after being translated. This is how much content is being reused or has the potential to be reused versus copied and pasted.” Things like that.
GK: Look at areas where that’s missing and start gathering those numbers. And I think we can kind of go back to something we talked about a little bit earlier too, which is pain points. Look at your pain points and say, “What information can we be gathering that we’re not? That can really help us explain why these are pain points to help solve the problem.”
AP: To get you out of the pain.
AP: Yeah. So basically, use your pain as fuel to get yourself out of that. The more specific information you have, the more compelling those metrics are going to be to help you fix the problem that is causing you all those pain points.
GK: And I think one other point that can be made about bringing in a consultant is that along with things like industry averages, they’re going to have industry experience that maybe you wouldn’t just from your individual organization. And so even if you don’t have really good metrics and industry averages can only get you so far, they can kind of come in and say, “Based on our experience and what we’ve seen across other companies in a similar situation, here are maybe some average estimates that might be kind of similar to kind of help you start calculating your ROI.”
AP: I agree with that. Absolutely. And I think it’s also important to think about when you’re looking at these numbers and these metrics. There are some also, qualitative things beyond the quantitative numbers that you need to look at too. For example, if you set up re-use well to ensure that approved safety information for your products is properly used across your entire documents set, all of your content, you’re helping to reduce legal liability by having a re-use scenario set up where information is approved and then used exactly as it was written across everything that reduces legal liability. Can you put a number on that? Maybe not, but it’s that kind of thing that you need to be aware of too. They’re going to be some things you’re not going to be able to give a precise calculation. So a lawsuit may not be something that you can put into a report with a hard number, but it is something saying you were reducing legal liability by using a process that has a very institutionalized re-use and review program built into it.
GK: Absolutely. And that’s a really important point because I’d mentioned at the beginning that there was one company I worked with that was not getting the kind of quantitative metrics, but they also weren’t getting any qualitative metrics and that was something that they wanted to build in. So being able to show not really a number but a kind of customer satisfaction statistic and being able to prove even if you can’t really quantify it with a number, just being able to show that your industry reputation may be improved, that your customer satisfaction may be improved. And then as Alan said, legal liability is another one. Also, kind of employee quality of work-
AP: And morale.
GK: … and morale, yeah. So there are a lot of ways that you may not be able to have a calculated into your ROI, but you could still use that to make a strong business case and say, “Here’s sort of our conservative estimate ROI but then also here are these other things that you can’t really measure that really make a strong case for going this route with your strategy.”
AP: Having both of those things in your assessment is important. I agree.
GK: So I think with that, we can wrap up. So thank you, Alan, for talking with me today.
AP: Thank you.
GK: And thank you for listening to the Content Strategy Experts podcast brought to you by Scriptorium. For more information, visit scriptorium.com or check the show notes for relevant links.