Most of us have heard of return on investment (ROI), how much income a company makes based on how much money is output into the world, but have you ever thought about what drives ROI?
Traditionally, everyone makes a big deal about return on investment. But ROI is based on a me me philosophy. How much did I invest, and how much did I get back for it?
You could invest a fortune (some companies do) in marketing and advertising, but if you want your ROI to skyrocket you’ve first got to think about your return on value (ROV).
In other words, how much value do your products or services offer?
ROV is all about broadening our thinking to ask questions like:
- How much value are we offering?
- Is there any way to increase this value?
- How can we express this value (benefits) in a cohesive way through all of our points of contact with clients and potential clients — including our website, social media, and other marketing efforts?
Once these questions are explored and answered, then we can move to the phase of investing dollars to get the word out. So, ROV is kind of like the foundation that your ROI is built on.
A good example of this is Apple, who charges a premium price for all of their products — and for the most part this price is accompanied by incredible value. From physical design to operating systems that have an excellent user experience, Apple delivers value first, and in doing so increases their ability to see a higher return on investment.
Apple has a ROV mentality — investing in the value of their product development, and this is directly tied to their sales success — before they spend a dime on advertising or marketing.
In the end, ROI doesn’t live in a bubble all on it’s own with a predictable outcome. One of the variables (a big one) is value. The more value you offer, the better your return on that value will be will be.
Investing in marketing and advertising gets our products and services in front of people, but value is what makes them buy.