Understanding your organisation’s return on investment (or ROI) is hugely important. Businesses generally spend money in order to make money and if the latter is not coming to fruition then your long-term finances could be in trouble.
However, it is not always easy to determine the areas of your business where you are not getting the return you want. In particular, the areas of your business that indirectly raise funds are hard to measure. By using data, however, this problem can be solved, and there is now more data than ever to work with.
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Sometimes the simplest way of measuring whether your business is working well is to ask your customers. An electronic survey can be quickly and easily created and sent out to as many respondents as you like.
What’s more, you are automatically given information on the number of people who ignored the survey, the number of people who left mid-way through and how long each respondent took to complete it. In addition, you can send different surveys to different demographics to gain more targeted insights. Perhaps you want to know how your new product is viewed by female customers or whether your customer service is appreciated by your younger customers.
The data that you receive from your survey can be used to tell you anything you like, as you will be the one crafting the questions. If ROI is your focus, make sure to ask how your customers feel about the areas of your business where your greatest outgoings are focused.
Helping your design team
Graphical design is such a subjective field that it is difficult to know in advance what will prove an effective design with your audience. Your design team may have years of experience under their belt, have undergone Adobe Illustrator training, and worked on plenty of projects in the past, but audience attitudes are always changing. What worked before will not necessarily work next time.
Social media data, however, can be used to give your teams more detailed guidance than ever before. In your marketing materials, you are likely to use a variety of different graphics, but which ones are leaving a powerful impression on your customers? With social media data you can monitor engagement to determine which designs are driving traffic and which ones should be thrown on the scrapheap.
This isn’t about criticising the designs that don’t work well, but it is about giving your design team visibility. Social networks are a highly visual medium and so infographics and images work particularly well when shared on this medium. However, there is a lot of competition now, with businesses from all industries creating designs to try to capture the attention of their audience. With clear data, however, you can funnel your design resources into the right areas and guarantee a higher return on investment.
Measure your marketing
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Marketing is one of the business processes that is being revolutionised by data. Previously, it was very difficult to gauge whether your marketing team was actually having an effect on your revenue. Sure, sales may have increased but that could have been down to a number of other factors. With digital marketing, however, there is much more accountability.
On the simplest level, it is now much easier to determine why a customer has bought your product. Using a metric like the click-through rate (CTR) can tell you which channels a sale has come through. In clear, black-and-white terms you can see which sales are being driven by social media, which ones come through pay-per-click ads and which ones are generated by your YouTube channel. This, in turn, shows you which of your marketing methods are proving effective and which are not. More than that, it gives you a figure showing which methods are bringing in more money than they cost.
Data also allows you to predict ROI before you commit to a particular approach to marketing. You can test different approaches and use analytics to measure audience engagement. This will then give you a rough idea about which methods will be worth investing in further and which ones will prove to be a financial black hole.
Training and development
Measuring the return on investment for any employee training programmes that you are running is also challenging. How do you put a value on the development of your staff, especially if they remain at your company for a long time?
One of the ways you can gauge the effectiveness of employee training is to collect feedback. There are a number of factors that you’ll need to consider, so you can’t simply ask your members of staff whether they thought the training was good value for money. Firstly, ask them about their emotional reaction to the training. What did they like about it and what did they dislike about it? Secondly, determine what they gained from the training in terms of personal development. Did they acquire any new knowledge or skills?
In addition, there are other ways that you can evaluate the impact of staff training. If you have more than one staff team that works on similar projects, you could have one of them take part in the training programme and another remain as the control group. This would provide you with clear data telling you whether the training has led to any increases in productivity and revenue.
If you want to measure the effectiveness of your staff training, make sure you focus on results. Some measurable indicators of performance include units produced, sales figures, inventory turnover, error rates, downtime, time taken to complete a project and, of course, the cost of the training. Keep track of any data related to these metrics and you’ll have a much clearer picture on whether your staff training programme is generating a good return on investment.
Data is being produced all of the time, in your everyday life and at work. Any business that doesn’t make use of this data, will not have the visibility to say whether their processes are working as well as they could be and whether their expenditure is generating income.