Analytics, Digital Marketing Analytics, Digital Marketing Strategy, General, Social Media Metrics and Measurement
Investment and Impact Prioritization Model to Improve ROI
Jun 06 2023
When calculating the prioritization of your investment and impact, a great way to see if you have an ROI – Return on Investment – is to graph it out. I like the Investment and Impact Prioritization Model. Even if you don’t have the exact investment or impact numbers, graphing your activities in this way (especially if you are tough and honest) will bring clarity to your choices and help you decide where to focus.
The idea is to give your best estimates. Consider all the costs, issues, efforts, and how many people could be reached or converted by your efforts. Graph all of your activities based on Investment/Impact, and you’ll find they fall into one of four quadrants: Time Drains, Big Bets, Low-Hanging Fruit, and ROI Center.
Low-hanging fruit is areas that are a low investment but also low impact. These are things that aren’t incredibly impactful but are easy to do. For example, these could be things like updating social media cover images. This section is often made up of odds and ends.
Since items in this section aren’t high-impact, they should be executed as efficiently as possible. For example, I don’t want to spend thousands of dollars and countless hours to create the best cover image (after all – it is low impact), but I want a good cover image. Efficiency over excellence since the impact is low.
The next section is the ROI Center – this is the section that will drive your ROI and where you want to execute with excellence because the results matter. The ROI Center is low investment but high impact. These are the things that can move your business forward without too much investment.
The goal of ROI Center activities should be to execute with excellence. These activities can grow your business and are high-impact – so you need to execute well to drive impact.
A big bet is something that has a big investment but also a big impact. This is expensive and difficult to execute, but the payout could be big. The challenge with big bets is to be sure that you have correctly estimated the impact so that they aren’t time drains.
Big bets usually require time, money, and effort to execute with excellence and make them work well. Be sure you have sufficient resources to allocate to your big bets so you don’t end up poorly executing something that doesn’t drive results for your business.
These are the worst activities to do! High investment but low impact. No business would deliberately work on time drains, but they often arise from an idea that seems like a good idea but is small in scope and impact when you think about it. For example, a suggestion for a new niche product for my business is very expensive (high investment), but the impact is probably small since it targets a niche.
Time drains should never be invested in, but most businesses miss them because they “seem like good ideas.” Run some basic numbers to estimate the real impact.
You may also find that activities that seemed like they were in other quadrants became time drains or moved around to low-hanging fruit. Be aware of activities that are growing in scope or investment or are a smaller impact than you thought. Don’t be afraid to rebalance.
Reassess your activities and priorities regularly, as you may initially over- or under-estimate. Check that low-hanging fruit doesn’t turn into a time drain because you hit a snag or had a technical issue, and know how much time, money, and effort you are willing to invest.
The Investment/Impact Prioritization Model, if used correctly, can be extremely impactful in helping you prioritize your business. This activity is best done as a team, and you need to be tough to know where activities lie. Often you’ll find that your pet projects or “great ideas” are a time drain.
Do fewer things better vs. taking on too much. Excellent execution is required for success, and if you spread your efforts too thin, you may find that you don’t execute anything well enough to get results.
This is an excerpt from Krista Neher’s best-selling book, “Digital Marketing That Actually Works.” You can find this and more books at Boot Camp Digital.
Try FREE for 5 Days!
