A clear brand story affects many parts of a business—here’s how to quantify the return on investment in compelling messaging
“I know our messaging needs help, but how can I prove the ROI?”
I’m asked fairly often how to quantify the value of investing in creating a more compelling brand message. At a granular level, the question is repeated regarding investment in creating higher-quality ‘content.’
These questions usually come from people who themselves have no doubt about the value of a clearer story. CMOs and other marketing leaders who came up through a content marketing or product marketing path understand this need in their bones. By the time we start talking, they have usually experienced firsthand the pain of trying to create a high-quality content stream or grow pipeline without having the company aligned on a clear core message. The question is really a plea to help them justify the investment of money and executive time to their colleagues.
I get it. We’ve long since moved from “mad men” to “metrics mavens.” Over just the decades of my own career, marketing has become far more quantitative: click-throughs, pipeline conversion, return on advertising spend. Data, data everywhere. Compared to the apparent precision of these metrics, measuring the value of brand message can feel very “squishy”—even if getting it right is essential to driving the rest.
Messaging is innately subjective, even if a lot of my own work centers on guiding that subjectivity into a structure. But the effects of getting it right can at least partially be measured. As an analogy, it’s hard to objectively measure the catchiness of a pop song—it’s something you feel in the listening. But streams and downloads can be quantified. The same marketing machinery applied to a song will yield very different results.
With that in mind, here’s a partial guide to quantifying the return on investment for clear and compelling messaging. The good news is that, because a clear brand story affects so many parts of a business, even relatively imprecise measurement often yields a strong business case.
Set the Bar High
My recommended first step in building a dollars-and-cents business case for a messaging makeover is, oddly enough, to make building that case harder. Rather than trying to create an illusion of quantitative precision, I suggest setting the ROI standard so high that even less precise estimates of return still yield a good decision.
When quantifying something that is difficult to measure, it’s a good general practice to set the standard higher to account for a margin of error. A 20% ROI might be acceptable on a pay-per-click ad campaign, where that percentage can be precisely measured. In contrast, investing in core messaging should be held to a higher standard.
For example, when clients are considering whether to invest in a message matrix process, I suggest that they determine whether it is likely to yield 500% their investment. This ROI standard is so high that it can reasonably be considered to overwhelm any imprecision in measuring message value. If the measurement is off and the downstream effects of more compelling messaging “only” reach 300% ROI, this still exceeds the return of most other available investment options. If, on the other hand, the potential value of a clearer brand message does not seem likely to yield a multiple of their investment, I advise potential clients to spend their resources elsewhere.
Fortunately, in many cases the return is in fact much higher. Let’s look at the elements that lead to meeting this high standard.
The ‘One More Deal’ Rule of Thumb
In B2B businesses in particular, the value of each additional customer or transaction can be quite high. The scale of the business determines whether “quite high” means $50,000, $100,000 or $1 million in revenue. In any of these cases, though, it’s reasonable to ask oneself, “Would a clearer story get us at least one more deal?”
Of course, whether a more compelling message would secure one (or many) more deals is a subjective judgement. However, it’s a judgment that executives considering a messaging exercise usually find very easy to make. If the company has lost deals it should have won, and if the losses were due to poor communication rather than poor product fit, then a clearer message is likely to help. If the answer is “yes” and the average deal value is high enough for a few incremental deals to meet the 500% messaging ROI bar, the business case is made.
Percentage of Sales
Of course, a clearer brand or product message should affect far more than one additional deal. When a business is in a period of transformation—be it turnaround or rapid growth—a more compelling story can produce a substantial lift in overall revenue. For some companies, re-messaging can even be the foundation of turnaround from sales decline to growth.
Messaging never works in isolation, but it affects almost every other aspect of the business. From internal alignment, to increased conversion rate on marketing campaigns, to increased and improved press, the effects of a clear and compelling story are pervasive.
One example I’ve experienced is the transformation of European meteorological services company MeteoGroup. While the company transformed many aspects of its business, its CEO, Donat Rétif, cited re-messaging as the foundation of the company’s turnaround. “[We were] actually declining in revenue for over two years, and within six months we’ve been able to find the inflection point and grow again with almost double digits over the last four quarters, so it has been something that has been absolutely sustainable,” he says.
What percentage of sales lift can message clarity provide for your company? Your mileage will vary and it’s best to be very conservative in your estimates. Some clients will create a spreadsheet that estimates increases in pipeline, conversion percentage and leads derived from increased publicity to arrive at an overall revenue lift estimate. Others simply make a best judgment estimate, then cut that estimate by 30% or 50% to create a conservative business case.
Lifetime Message Value
Like capital equipment, a brand message is a durable asset that yields value over its useful life. Any estimate of ROI should include all of the positive effects cited above over a period of years. In fact, it’s common for the effects of improved messaging to increase after year one, since it takes substantial time for the new message to imprint on the market.
Brands and their value can, of course, persist for decades or longer. But in rapidly changing fields such as technology, I’d suggest assuming a shorter asset life. The refresh cycle I’ve seen in my practice is about two years. This isn’t to say that your core brand will completely change after two years, but that it seems to be the median period for doing a review and possibly a refresh.
Because a refresh means a new investment, for ROI purposes two years is a conservative interval for estimating the value of your initial messaging investment. Expecting more pipeline or higher conversions when your message is clearer? Multiply those annual estimates by two years for a conservative estimate of lifetime ROI.
Quantifying the Qualitative
As you can see, my approach quantifying the value of brand messaging is hardly exact. It rests instead on the fact that story clarity affects so many aspects of a business that even the most conservative estimates often yield an indisputable business case.
Do you have thoughts for how to better measure the “return on message?” Perhaps ideas for a handy messaging ROI calculator?
Illustration courtesy of unDraw.