Cog Design Joins the B Corp Community
Since beginning my career at Spektrix in June of 2021 as a remote worker out of our NYC office, various COVID restrictions have prevented me from...
As arts organizations, we fight for our budgets every day. That’s why understanding how and when to figure out the return on investment of our efforts is so important. ROI can clarify what is worth spending our limited hours and funds on to make the greatest impact.
ROI, or Return on Investment, is a performance measurement. It measures how efficient an investment is. Though commonly seen in marketing, ROI can be used in all departments at your organization.
ROI is calculated in these three steps:
(Revenue – Expense)/ Expense = ROI
For example, if your organization sent out an annual campaign letter that cost $3k to distribute and ultimately earned you $5k from those patrons, then the ROI on that effort would be $1 earned for every .66 spent or 166%.
ROI can be used strategically in many ways. ROI can help you track those trials and errors of new strategies and tweaks to schemes. Validating costs and hours spent, ROI can also prove success and failure to board members and senior staff, or as benchmarks to go back to and compare campaigns year over year. Essentially, ROI is used to track your own efficiency and can be utilized to find the most efficient route possible.
To determine ROI, you need to evaluate the cost of your investment or project. This may include tracking hours and giving a monetary value to them. Then you want to track the return-- the amount you’ve earned. What you are ‘earning’ may not be in dollars but to keep a cohesive number, you may need to determine a value for a positive response to your outreach, such successfully signing up a patron to your email newsletter or increasing the number of shares of your social media content.
ROI validates. You can use it to know where you stand and continue to use it to make sure your resources are being used as efficiently as possible. Make tracking ROI part of the start of every project and write down how you plan to do it.
Use reporting tools in your ticketing system to validate new and old efforts. In doing so, you will be able to make data-driven decisions on the best ways to spend your time and budget.
Rachel Feldman is a former member of the Spektrix team
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