When you consider that there are thousands of digital signage manufacturers, untold numbers of content providers and new technology being introduced every year, the possibilities provided by digital signage are nearly endless. That said, the criteria for success of each given digital signage project should also be unique. As an integrator, you can help customers determine their return on investment (ROI) – and then maximize it.
Like every new technology, any investment in digital signage requires a careful cost-benefit analysis. The budget, motivation and business model for a given project will impact the ROI model significantly. For example, is the customer hoping to increase sales, improve brand image or both? Is your customer displaying branded content within their own stores, or subscribing to a content network that involved partnering with other businesses? The unique nature of each digital signage project calls for its own unique ROI plan.
Digital signage is also distinctive in that it can have several intangible impacts on a customer’s business. For example, you can’t concretely measure an impression or slight changes in consumers’ perception of a brand. These types of positive effects should also be considered in each ROI model. By starting with a similar ROI equation for each project, you’ll ensure that every aspect is considered.
The ROI Equation
In the simplest terms, ROI is the ratio between benefits and costs. To establish the ROI parameters for a digital signage project, first ask yourself if the investment truly meets the business’ initiatives and strategies. What is your customer trying to accomplish in the short term, and the long term, with their new digital content? Be sure to clearly define the key stakeholders and understand who is responsible for the network’s success. This will help you to get a clear picture of the expectations, lay out your strategy and create your ROI model.
Next, define your costs and benefits:
- Consider all costs – both initial and ongoing – associated with the project, from analysis and design to hardware, content and internal resources. Reference how much the customer is paying for their current communications. This benchmark will help you to better track the entire digital signage expense (and the relative success of the project).
- Establish your required benefits. The benefits of a digital signage network are often both objective and subjective. Objective benefits can include sales lift, decreased marketing costs, increased ad revenue or even decreased returns. Subjective benefits might be improved brand recognition, a better customer experience and improved employee morale.
Finally, decide how the benefits will be measured and how often. Objective benefits are usually easier to measure than subjective. For example, weekly sales reports can clearly indicate how digital signage is impacting sales, but brand recognition is harder to quantify. You may need to get creative in measuring the subjective benefits. Consider analyzing brand awareness, customer experience or perceived wait times through a customer survey. Or, track the mentions of your brand on social media and see how your digital content is impacting word of mouth.
The Integrator’s Role
Remember, your role in this process is to help each customer make a return on their investment. Be sure to identify the appropriate benchmarking points from their previous communications efforts, engage each relevant stakeholder, and review and outline real-life measurement examples. Explain that every digital deployment scenario differs, with its own set of challenges and opportunities that can impact ROI.
By paying close attention to the needs and goals of each customer – and through continued experience over time – you’ll learn how to best define and maximize ROI. If you need help along the way, several different ROI equations exist for creating estimated ROI models. These will help you to benchmark and measure against traditional communications and more accurately track the success of the digital signage project.
You Tell Us
What best practices have you encountered in creating digital signage ROI models? How have you dealt with the inherent difficulty of measuring subjective benefits like improved customer experience?