As the year draws to a close–you’re probably trying to calculate the return on your investment in public relations. Here’s how to measure the ROI of public relations activity
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I read an article recently that talked about how AVE [Advertising Value Equivalent] was outdated and suggested that a better measure of publicity activities should be gAVE [Google Advertising Value Equivalency].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
— What is public relations?
Public relations is a process of strategically building mutually beneficial relationships with the people that matter most to the growth of a small or early-stage business.