With any ROI calculation, there is no estimating of PR/C intangible outcomes and then trying to give them a financial value. There must be clear evidence that communication behavioural outcomes were realized. There must be clear evidence that another function’s conversion outcomes were realized from the communication outcomes. There must be clear evidence that organizational financial benefits were realized from the other function’s conversion outcomes. For the ROI calculation, organizational financial returns or benefits are compared to organizational financial investments. A Set of Principles for the Use of a BCR Metric for a PR/C Program or Campaign The projected campaign must have a clear path to its expected end state. That end state includes both first and second tier behavioural change, as well as the number of individuals affected. Therefore, it includes the actions of other functions. All potential investments must be accounted for, including PR/C’s and a subsequent function’s investments. These investments will include fixed and variable costs for both, as well as sunk costs as appropriate. There must be an expected sum of money as the benefit or return from each individual. That is, the financial value for each possible closed sale, each closed signature or each final action is required. Therefore, these are net financial returns or benefits, taken after all sale returns are made and all changes of mind are made. When utilizing compensating variation to assign monetary benefits, accuracy in the identification of campaign effects and accuracy in the valuation of those effects are necessary. Objectivity is required. A positive benefit cost ratio means that expected financial returns will exceed financial costs. If not, the program needs to be altered. Or, an alternative program should be proposed. Proposed programs can be examined based on a comparison of benefit cost ratios. At the same time, a baseline ratio should be established first. The baseline is the minimum ratio acceptable for the introduction of any and all new programs or campaigns. A Set of Principles on the Use of a Cost Effectiveness Metric All potential investments must be accounted for. These investments will include fixed and variable costs, as well as sunk costs as appropriate. An effectiveness benefit must be identified, one that is universal to ensure a solid comparison. For investments in Overhead, the benefit may be for the effectiveness of meetings, with comparisons for example between the effectiveness of face-to-face, Skype or video teleconferencing. For investments in PR Support Services, the benefit
With any ROI calculation, there is no estimating of PR/C intangible outcomes and then trying to give them a financial value. There must be clear evidence that communication behavioural outcomes were realized. There must be clear evidence that another function’s conversion outcomes were realized from the communication outcomes. There must be clear evidence that organizational financial benefits were realized from the other function’s conversion outcomes. For the ROI calculation, organizational financial returns or benefits are compared to organizational financial investments. A Set of Principles for the Use of a BCR Metric for a PR/C Program or Campaign The projected campaign must have a clear path to its expected end state. That end state includes both first and second tier behavioural change, as well as the number of individuals affected. Therefore, it includes the actions of other functions. All potential investments must be accounted for, including PR/C’s and a subsequent function’s investments. These investments will include fixed and variable costs for both, as well as sunk costs as appropriate. There must be an expected sum of money as the benefit or return from each individual. That is, the financial value for each possible closed sale, each closed signature or each final action is required. Therefore, these are net financial returns or benefits, taken after all sale returns are made and all changes of mind are made. When utilizing compensating variation to assign monetary benefits, accuracy in the identification of campaign effects and accuracy in the valuation of those effects are necessary. Objectivity is required. A positive benefit cost ratio means that expected financial returns will exceed financial costs. If not, the program needs to be altered. Or, an alternative program should be proposed. Proposed programs can be examined based on a comparison of benefit cost ratios. At the same time, a baseline ratio should be established first. The baseline is the minimum ratio acceptable for the introduction of any and all new programs or campaigns. A Set of Principles on the Use of a Cost Effectiveness Metric All potential investments must be accounted for. These investments will include fixed and variable costs, as well as sunk costs as appropriate. An effectiveness benefit must be identified, one that is universal to ensure a solid comparison. For investments in Overhead, the benefit may be for the effectiveness of meetings, with comparisons for example between the effectiveness of face-to-face, Skype or video teleconferencing. For investments in PR Support Services, the benefit
Fraser-Likely-Principles-for-the-Use-of-ROI-BCR-CEA-metrics-in-PR_Communication1.docx