First off, this is not a personal question. It’s business. In fact, it’s the most important question in business — and executives are asking it every day.
How can you quantify your contribution to the business? And do you even want to spend your precious time on this? Based on Forrester’s research, the answer is pretty clear: yes. Within the next 3 years, more than half of market insights professionals expect to have to quantify their ROI to the business. Executives are pushing marketing to show its ROI and will soon put pressure on market insights. Are you ready?
Market insights professionals tend to see it as difficult, if not impossible, to quantify the value and ROI of their organization. How do you quantify the impact of an intangible service that is not sold? In researching the answer, I found a couple of smart approaches, like market insights soliciting bids on a project — which they intend to do internally — to determine the fair market value (FMV) of its service. I also found some questionable approaches, like calculating the theoretical opportunity cost of not doing research.
When looking at business impact, there are typically three types of measurements of success: 1) hard metrics, which have known links to revenue and/or profit gain; 2) soft metrics, which have known links to business improvement but unclear links to actual revenue and/or profit gain; and 3) the “halo effect”, a non-quantifiable gain that doesn’t necessarily translate into immediate customer action but can help drive business results incrementally and over the long run: