Getting B2B Content ROI Right

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Getting Content ROI Right

In this digital era, the nature and role of customer content has new meaning and significance. Content is a strategic business imperative because it is a key driver of top business and functional objectives.

Poor performing content lowers outcomes. Misunderstanding content ROI elevates risk of poor decisions about content strategy and investment.

The risk to senior executives in B2B selling enterprises, of not taking a strategic perspective on customer facing content, impacts their decisions about top business objectives:

  • New customer acquisition and revenue growth
  • Sales and marketing productivity, and lower selling costs
  • Data acquired about buyers, customers
  • Consistent delivery of an exceptional customer experience.

Robert Rose Content is What We Are 400x151But most executives have never given serious consideration to customer content as a business asset. It has always been the tactical responsibility of knowledge and creative people. One executive expressed what I most often hear: “What is content anyway? Collateral, right?”  (See What is Content?)

Most senior executives are still adjusting to the new realities of the digital era. (See McKinsey – Why digital is a core leadership issue) However marketing executives are not immune. Despite the rhetoric, pressure to measure and justify everything has elevated focus on tactical performance over serious consideration of strategic business impact.

Understanding Financial Terminology

Return on investment is, of course, dependent on knowing both the investment number and the value or return number. B2B enterprise executives have only a casual or gut feel for both.

It’s important to understand the financial distinction between “investment” and “expense.”

Investments are typically made in assets, and are capitalized financially because they deliver long term value, typically well beyond a year. Therefore, standard accounting practices allocate the cost of an asset to each year of it’s useful life.

An expense is an expenditure that delivers value in a more immediate time period, typically less than a year.

So, clearer cost language would differentiate content investments vs expenditures (or spend).

More accurate value language is “performance” for expense spending, and “ROI” for true investments.

These distinctions matter because they represent different kinds of decisions, with different expected value.  

Content has traditionally been considered an expense. The cost was financially applied in the fiscal year in which it occurred.

This made sense when content was about vendors, their products, features and benefits. Those messages and content inevitably changed annually.

But digital era adoption of customer-centric, education oriented, digital content practices has changed that. The long memory and easy access to digital content provided by internet and search have given even “long tail” content prolonged life.

Calculating Content Spend

The rhetoric of “data driven decisions” is quickly becoming a business imperative and key competency. Here, businesses really have work to do. Most organizations don’t know how much they really spend on customer facing content. Tweet this!

Consider content expenditures in three categories:

Content Spend & Content ROISanctioned and Known spend are supported by a line item in the financials. Does it exist at a functional level on your books? As an aggregate number?

Sanctioned and Unknown spend are sanctioned content expenditures that are not captured because they are embedded in events, projects, or are too small to capture. This spend might also be a part of individual jobs, but is not captured and reported as cost of content. We hear common agreement this number could be at least as large as known spend, possibly much more.

Unsanctioned and Unknown spend is on customer facing content that is embedded in the jobs of people who are not officially responsible for content creation, but end up doing so as a normal part of the job. The problem is, this number has significantly escalated over the last five to ten years, (as has the sanctioned content spend number) to where it’s a significant factor.

To add to the direct dollar costs, we find this often involves “the wrong person, doing the wrong work, at the wrong time, in the wrong way.”

For example, if your known content spend is $1 million, your total cost could well be 3 to 5 times that number. But if the true expenditure number isn’t known, obviously the integrity of content ROI calculations are compromised.

Years ago, the Forrester Sales Enablement Group wanted to identify the cost of supporting an enterprise sales rep, over and beyond their direct compensation cost. They developed a value model comprised of all the associated expense areas and worked individually with about 80 enterprise organizations to apply the model. They discovered a cost of $135,262 per rep in support related activities. (See Forrester Research – Hidden Cost of Sales Support)

Wouldn’t it be interesting (and useful) to see this approach applied to enterprise customer facing content costs?

Performance vs. ROI

For content, rather than the term “content ROI,” we find the language “short-useful-life content,” and “long-life content assets” creates clearer understanding.

Calculating and analyzing content “performance” for individual assets, asset categories, and programs is an important activity for tactical functions. This provides the data required to make tactical, data driven decisions, on many related factors (including people performance). It provides feedback needed for content improvement.

But performance shouldn’t be confused with the more strategic consideration assigned to ROI. And it is.

The purpose of ROI analysis is to inform and direct strategic decisions about resource allocation across the business. This always involves trade-offs, decisions about what not to do (See What is Strategy).

This informs the approach we recommend to define your content value model.

Content becomes a strategic asset when it performs well over time. This is a new consideration because traditional customer content was seldom intended or designed to perform over time, although some did.

Content becomes a strategic imperative when it is a key driver of business functions and primary enterprise objectives. If you don’t know, or can’t articulate, or can’t demonstrate how content does this, then you must figure this out first.

Perhaps the most powerful way to consider return-on-content-investment is to evaluate how content, and related initiatives, can improve outcomes and lower costs for primary business objectives.

How does/should/could content drive improvements in:

  • New customer acquisition and revenue growth
  • Sales and marketing productivity, and lower selling costs
  • Data acquired about buyers, customers and marketing and sales operations
  • Consistent delivery of an exceptional customer experience.

These questions elevate content consideration from the tactical to the strategic level of the business — where they it ultimately must be in the digital era. 

A more comprehensive, business wide perspective on content investments will consider:

  • Right sizing investment in specific content projects
  • The value of shared and re-usable assets
  • Switching content and automation tactics for expensive human resources for specific tasks
  • Better strategic planning, operations, content management, people support and infrastructure investment to leverage and extend the value of content assets.

Strategic Content Value Model

What’s often missing in organizations (in addition to a well-developed and documented content strategy) is a strategic content value model.

The main point is to tie the impact of content, and content dependent initiatives, to your organization’s primary business outcomes.

Of course, this means you must know the baseline costs, as well as value and productivity measures for each category.

This will also help you with content strategy development.

ROI of Content Marketing Brenner

By way of example, here are more useful ways to think about, and ultimately measure, the return on content investments for the business.

Cost of Customer Acquisition

For all the rhetoric about proving the value of new approaches, most organizations can’t answer questions about the current cost of customer acquisition to provide the baseline for comparison.

Analyze the major activities and key dependencies for customer acquisition. Use your analysis of your buyer’s decision process, and your sales process, to identify key touch points — “key moments of truth” — for new customer acquisition.

What are your performance metrics for each activity? Drill into specific elements to understand the activities, methods, effectiveness, inefficiency and cost of each.

Key customer acquisition performance indicators might include:

  • Lead quality, volume and cost per lead
  • Number of new customers acquired (vs. baseline)
  • Revenue growth rate (as well as product/solution mix)
  • Customer retention rates

Ultimately you want to quantify the total cost of customer acquisition, and the cost of each primary support activity.

Sales and Marketing Productivity and Costs

This will bring you immediately to this category.

For marketing and sales productivity assessment, look for activities missing content support. Look for process delays, bottlenecks or risk points. We refer to these as content use case requirements, which should be well defined and documented as input to content strategy work.

Sales content use case examples include:

  • Prospecting support — attention, interest, initial engagement
  • Emails, with links to relevant content
  • Voicemail Scripts
  • Lead nurturing content to stay top of mind
  • Conversation / Message support – conversation starters, questions, stories, facts, images, visual support, answers to buyer questions,
  • Customer diagnostic support tools
  • Customer education, complex explanations, influence mindset and challenge status quo, influence buying criteria, answer buyer questions
  • Gain access other members of buying team
  • Communicate and prove value

Identify baseline metrics for key sales performance indicators. Examples include:

  • Time sales people are applied to qualified active buyers
  • Sales productivity measures: revenue per rep, margins, yield per rep (revenue/rep cost)
  • Win rates
  • Cost of worked but not won business
  • Sales cycle time and cost
  • Marketing contributed leads and CPL
  • Content used, touched, influence on buyers — life-time value of content

One of the best justifications for content investment comes from shifting business activities from higher cost, less effective resources to lower cost, higher effectiveness, content driven tactics.

For example, when B2B direct sales reps spend a significant amount of their time prospecting, it is usually more effective and efficient to transfer most responsibility for lead development to marketing.

Acquire Buyer and Customer Data

In the digital era, the ability to make data driven decisions is a key competency.

Content is an important factor for capturing audience data. How have you documented the data categories you want to capture about buyers, customers, influencers and other key audiences?

How are you applying the principles of digital body language to your content strategy?

Exceptional Customer Experiences

In the era of virtually unlimited information and options for buyers, buyers have difficulty differentiating company offers.

The relationships companies establish with buyers through experiences that span the entire customer lifecycle, from before a purchase through after, has become a significant factor for competitive advantage. Content is a key enabler of every customer touch point. (See Content Is What We Are)

Content Asset Valuation

Serious execution of the content ROI principle requires practices common to all asset management: documented inventory and individual asset valuation.

Content inventory must shift from a periodic event documenting major finished pieces, to a regular disciplined practice of identifying all content assets. We must learn to value content assets, the way we do physical assets, software, customers, patents and goodwill.

DMS Content as Assets Quote w Pic600x238

Summary of Specific ROI Considerations

  • Explain the meaning and implications between expenses and assets in all content value conversations.
  • Capture and report content performance metrics to monitor the impact of content on tactical initiatives.
  • Develop and record content ROI measures to indicate the strategic value of content investments on major business objectives, over extended time periods, compared to alternative methods of achieving similar results.
  • Define content use case requirements for all customer engaging groups across the organization. Provide this as input to rigorous content strategy work to prioritize investment in long-life content assets that impact strategic business objectives.
  • Institute mechanisms to capture the cost of all customer facing content throughout the organization. Maintain a content asset inventory record.

Related Content

Is Content an Asset or an Expense?  (Also an example of walking the talk!)

It’s Time for Content to be Valued Like Customers and Patents and Inventory  

Content Marketing – A Strategic Solution to a Strategy Problem 

The Finance of Digital Marketing & How it Bends Corporate Strategy (For an excellent, comprehensive explanation see link in this article to e-book: Financial Executives Guide to Digital Marketing Investment)

Reframing Content ROI and the Case for B2B Content 

Common (Mis)understandings of Marketing ROI

Forrester Research: Measure Content Marketing for Success

Content Is What We Are

The Right Way to Calculate Marketing ROI (With link to “one academic write-up that’s a must-read for marketers of all stripes who want to truly understand and credibly calculate MROI.”)