Return-on-Investment: Research & Insight
Having worked in business for many years in a research capacity. I am always excited to listen to how departments show their Return-On-Investment (ROI).
I am going to discuss 4 reasons why it’s difficult to quantify our work. Including alternatives and recommendations to create a return-on-investment figure for your work.
The easiest and most sensible definition of return-on-investment is from the Entrepreneur.
For departments such as sales, it is easy to calculate a return-on-investment figure.
Also, it’s straightforward to calculate a marketing return-on-investment because of the different metrics. Such as Buffer, Hootsuite but even Facebook can give marketing teams a return-on-investment.
For my blog, I take some return-on-investment top-tips from the Social Media Examiner
What about market research and Insight?
How do you provide a return-on-investment figure for your work?
We live in a competitive world where job cuts and also promotions are high on a company and employee minds.
You have to look at the merger between ResearchNow and SSI.
Every business decision hinges on Return-On-Investment. For the majority of researchers, market research is a means to an end. It does not generate revenue.
This means we face a dilemma when trying to provide a return-on-investment for our role and team.
WHY SHOULD WE CALCULATE OUR OWN return-on-investment?
There are 4 main points why we should look at return-on-investment:
- Understand the optimal scope and size of MR activities
- Develop and defend budget proposals
- Measure, track and improve performance
- Explain the tangible value of MR to stakeholders
It is difficult to understand whether our time, money and resources are contributing to objectives when using market research.
It is a tricky beast to work out. Despite the importance of return-on-investment for all businesses and departments. Market research has no gold standard or go to the formula that can solve this dilemma.
One of the problems is that market research is very difficult to quantify.
Market research can only have a return-on-investment figure if someone uses the data
It’s an important concept that is sometimes forgotten about. Especially when you are juggling so many different projects. I have to juggle projects relating to different subjects. So it can be tricky to find the important figure I am most interested in.
It’s important to know whether the market research we have conducted has brought a result.
We then need to understand the costs and revenue in association with the change. So we can calculate a return-on-investment from our market research.
We all know that it could take many months or years to actually know how our research has been used.
I would recommend putting notes in your diary, to follow up with individuals. To gain an understanding about how your research has been used. Don’t forget that some market research is conducted to provide a summary or an update. Thus, change might not be necessary.
Don’t think that market research has to deliver a currency sign
Market research is always going to be subject to the action of decision makers. Researchers can give more data and PowerPoint slides. Yet, it all depends on what a decision maker will do with it all.
This can actually be very individualised like we all are. Everyone talks differently and we all have a different chimp that somewhat controls our thinking.
My chimp tells me when to eat and drink, which is always!
You can see how I use my chimp to its best effect via one of my recent blog posts about my personal brand here.
This is similar for decision makers when looking at market research. Some will action things straight away and others may not.
Confirming a judgement
It will always be difficult to assign a return-on-investment to all your work. Especially when decision-makers are using the market research to confirm their judgement. Which could be obvious to many.
Personally, this is where you put your hands up and follow up with the decision maker. Ask if any of the market research provided any surprises. If so, do they think any business actions could be taking place from them?
Your work could impact on too many departments
It becomes very tricky to pinpoint who is using the market research findings you have found and who is not. It can be time-consuming because they could be in various department and even countries. This can mean it’s difficult to unpack the ROI your market research has actually provided over a period of time.
Calculating a return-on-investment from market research is often a difficult beast to understand.
There are so many different factors that could contribute to the success or failure of a business.
Having said that, with business shortfalls comes job cuts and management change. This means individuals and departments must provide reasons why their department is so important.
In a world where return-on-investment is so important for all businesses. It is difficult to understand why the sector has a dilemma when trying to provide an ROI of its work.
How do you calculate an ROI figure for your work?