What’s the true value of your digital strategy?
Everyone has the same challenge when it comes to digital business, so if this sounds like you, know that you’re in good company: I have no idea how much I should spend on my [website, social content, digital ads, etc]. And most businesses end up using the minimum acceptable budgeting method. That means that they invest just enough money to get to a place where they believe that they have just enough resources to get the job done. I’m going to offer a method of valuing your digital presence that makes budgeting a whole lot easier, and may just free up budget in ways that you hadn’t considered before.
We call it the Digital Business Value method, and it can be applied narrowly (to a single channel/platform) or to your digital marketing as a whole. To determine your DBV, just find and add the following:
- Incremental revenue. How much real, measurable incremental revenue does your digital drive each year?
- Added value. Does your digital business provide you with any of the following? If so, what would you otherwise pay for it?
- Earned media
- Increased customer lifetime value (loyalty)
- Brand awareness
- Competitive intelligence
- Market research
- Displaced costs. Which line items are reduced, or eliminated, because of your digital business?
- New employee recruiting
- Customer service/call centre
- Employee retention
- Investor relations
- Reputation management
Try it out for yourself — add the 3 categories and what number do you get?
Now try running the same formula, but instead of assigning dollar values based on what you’re doing today, project what those values might be if you really invested in your digital and took a serious step forward. I’m willing to bet that the Digital Business Value number gets a whole lot bigger than the amount that it would cost to get there.