How to measure ROI on public relations

As the year draws to a close–you’re probably trying to calculate the return on your investment in public relations.

Public relations companies have long struggled to measure the value of what they do. Some cite “awareness” or “engagement” but both are meaningless based on current metrics. Part of the problem is that they’re not selling public relations; part of the problem is that they’re selling something that is reliant on so many unknown variables – there are so many things that traditional PR agencies have no control over. The other problem is that their definition of return is based on an estimated financial value of advertising, rather than the value of the product of their labors.

I read an article recently that talked about how AVE [Advertising Value Equivalent] was outdated and suggested that a better measure of publicity activities should be gAVE [Google Advertising Value Equivalency]. It might be me, but it doesn’t sound much of an evolution – you’re still measuring an estimate of advertising equivalency based on a cost per page impression and using a value defined by a publisher – Google. The problem remains that a gAVE calculation makes assumptions: the most obvious one being whether the audience is the right one for your business but others like whether customers have a need, whether they have purchasing authority or influence in the purchase decision, or that they will be motivated to enough to reach out or click a link to a website to find more information. It also relies on the assumption [often incorrectly] that the reader or website visitor will initiate a conversation.

As entrepreneurs, we’re building businesses around a set of, hopefully validated, assumptions. We know that the problem we’re solving exists and we know who our ideal customer is. Right? So, what if, rather than trying to measure the value of public relations using an abstract like advertising equivalency we measure it on something that we already has value – relationships with the people that will help us grow successful, profitable businesses such as prospects, customers, industry luminaries, purchase influencers, advocates, journalists and investors.

We subconsciously measure relationship strength in our personal lives every day. We know if we’ve annoyed or irritated our spouse or partner, or whether a friendship is strong enough to support a disagreement. Whether we can count on somebody to help us when we need it – no matter what – or whether they’ll make promises but never follow through on them.

What if we measured the strength of our professional relationships in the same way? We could measure the strength of the relationships needed to achieve commercial goals and monitor whether our behaviors strengthened or weakened them. We could identify which relationships were necessary – and the strength of each – to achieve a specific outcome.

Try something with me now. Who are the 6 – 10 people that you need to have relationships with in order to achieve your next milestone? Write them down.

How strong do you need each of those relationships to be in order for you to achieve your desired outcome? Give each of them a rating between 0 and 10 with zero being no existing relationship and 10 meaning you have a relationship with them that you could call them today to ask for their help and they’d do whatever they could to help you.

Now use the same scale to give your relationship with each of the people on the list a value using the same scale. Zero being no relationship at all and 10 being a relationship you could bet your business on. How do they compare?

Chances are that there will be gaps – and that’s OK. It is the function of PR to help strengthen relationships where you need them to be stronger–and maintain the relationships that are where you need them to be. In many cases, to build a relationship with somebody on your list, you’ll need to build relationships with other people that can provide you with credibility, testimonials, social proof and, in some cases, introductions.

The list you have will contain the most important relationships for achieving your next milestone. Revisit and update it every time your goals change to ensure that you’re PR strategy is always focused on building and maintaining relationships with the most important 6 – 10 people for achieving that specific outcome.

Measuring public relations is easy when you know what you should be measuring – it’s all about measuring relationship strength with the people that are critical to the growth and long-term success of your business. When you’re defining the measures of success you want from for your PR activity in 2015, focus on relationship strength with named individuals and ask your PR company or your own team members about how they’ll help you achieve it.

Startup and SmallBiz PR and marketing tip: be clear on what your desired commercial outcome is before you start any public relations, marketing or publicity activity – it’ll make it far easier to measure whether you have delivered it.

This post also appeared on Launchable Magazine http://www.launchablemag.com/?page=post&title=Measuring-PR-Its-All–About-Relationships-Not-Coverage

PR & marketing killed Target in Canada

Target has just announced that its expansion in to Canada will end, with the closure of 133 stores.  Why? A fundamental failure of the company’s marketing.  Target failed to understand the market and, as a result, failed to provide the products Canadian customers wanted, at the right price and failed to promote itself correctly.

I remember my first trip to a Target south of the border in the mid 1990s. It was a revelation.  Living as I did in the UK there was nothing like Target – somewhere you could go to get almost everything at incredibly competitive prices.  Having visited Target stores in the US many times since I moved to Canada in 2010 the experience in my local Canadian store was a very different experience.

Having experienced the US stores, Canadians wanted that same combination of product choice and price that they experienced there, but the company failed to replicate it successfully in Canada. This breach of customer goodwill made Canadian customers think differently about the company.  Combine this with a lack of a clear differentiator between stores like Canadian Tire and Walmart and you have all of the ingredients for failure.

That, in my opinion, is the reason for Target’s failure in Canada.

Startup and SmallBiz PR and marketing tip: business success is based on building and maintaining solid relationships with the people that matter most to achieving it.  Don’t take your customers for granted and be prepared to stick with it for the long haul. If you change the brand experience – a combination of value proposition, core values and customer experience – then you fundamentally change the relationship you have with customers.

BlackBerry Has Lost Control

Update: An unsubstantiated rumour on May 11 2015 that Apple could be interested in acquiring all, or part, of BlackBerry caused the Waterloo-based company’s stock price to skyrocket.

Yesterday I explained that BlackBerry is facing its biggest challenge yet as it looks to turn the business around: an increasing number of people, including once loyal users, appear not to care.  Shortly before the markets closed yesterday a report surfaced claiming Samsung had approached the Waterloo-based company about a takeover.  The share price rocketed before falling back in after hours trading as the approach was denied by BlackBerry.

It’s another demonstration of a company’s future [and stock price] is in the hands of others.  The fact that the only people who appear  interested in BlackBerry are investors, looking to make a quick buck on M&A rumours, rather than a long-term recovery of the business through selling products customers – it has been reported the company is having trouble winning back corporate customers] want to buy then it reinforces the point I made in my earlier post.

The company has lost control of its own destiny.  It is at the mercy of its news agenda.  It cannot control [I would argue it is unable to define a clear brand or value proposition] its own destiny. It’s the last place a company ever wants to be and it appears not to know how to regain control.

What do you think? Do you agree or disagree?  Tell me in the comments below.

Startup and SmallBiz PR and marketing tip: whatever you do, retain control of your brand and its perception.  When a third-party has control your business is almost certainly doomed.

BlackBerry’s Biggest Problem: Nobody Cares

I’ve been talking about what I perceive are the reasons for BlackBerry’s demise in recent years.  There’s a long list from product market fit to a failure to grasp the fundamental shifts in consumer tastes; a failure to understand what its customers wanted to abysmal marketing and PR strategies.  But BlackBerry faces its biggest problem yet.  One that no company wants to find itself in.  It is almost always fatal.

*NASDAQ stock price at time of recording was $9. 40

Startup and SmallBiz PR and marketing tip:  Stay focused on the value you deliver that nobody else can and reinforce this wherever possible. When nobody cares about your company it’s over.