It’s not just ROI. It’s RELEVANCE!

The other day I was driving home from a family vacation using an iPhone app called “Navigon.”  This is an excellent GPS and mapping application that gets me where I want to go without the expense and hassle of having schlepping another device.

So I was wondering … why am I not using a mapping application from Rand McNally, the dominant market leader in all things maps for decades?  For most of my life a well-worn copy of a Rand McNally atlas of United States maps was a fixture in my car. Can you even name another company that made U.S. road maps?  Certainly, Rand was the gold standard for getting you to where you wanted to go.

The company has a minor entry in the GPS device market and are usually grouped under the “other” category in the analyst reports. A search for Rand McNally in the iTunes app store delivers one sad little entry that allows you to “vote for the best small towns of 2011 — right from your mobile device!” Wow.

Sad. Sad. Sad.

I can imagine the conversation among the Rand McNally executives five years ago … “Digital?  Are you CRAZY??? Do you know what the ROI is on our paper maps?  Why in the world would we ever cut into that profit margin?  Nobody seems to be able to demonstrate an ROI on digital maps!”

It’s probably the same conversation that echoed through the halls of Kodak … “But we make so much money on film!  What is the ROI for sharing digital photos on the Internet?  It’s folly!”

I wonder what the ROI of bankrupt is?

And yet, if you have ever given a speech, a webinar, or a class on social media marketing, I can almost guarantee you have received this question: “But how do we measure the ROI of this stuff?”

Look, I’m a true-blue ROI guy.  Frankly, money is one of my favorite things. I’m a measurement fanatic and a data geek.  But pull up a chair and let me give you a dose of reality here. If you don’t have a digital strategy, your business is going to die.

And by digital, I don’t mean “a website.” In the last two years, 68 percent of the Fortune 100 companies had a year-over-year decline in their website page views. Why?  Because people are not looking for you on websites any more (unless you work for Amazon, eBay or Etsy of course). For most companies, having a website is simply not enough these days.

Every business exists to create shareholder value. But please don’t overlook the possibility of not even existing in two years because you are milking an Excel spreadsheet for all its worth. There are lots of bright people out there that want your company to die. Be them, or hire them.  Just don’t hold on to old business models until the banks are nailing your door shut.

It’s not just ROI. It can’t be just ROI. It’s relevancy. Don’t be Rand.


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  • OK! Ha, point made.
    Can we state that even a bad digital presence is better than no presence?

  • Ouch. That’s a good question. I would say if it detracts from the brand or company value, then no, that probably is not right. What do you think about it?

  • Funny – I had a similar discussion with some friends about Mapquest the other day. Remember when we used to say that you should “Mapquest it” when looking for directions? Google has since eaten their lunch. I think they may finally have mobile apps, but they are so far behind the other tools on the market they are no longer relevant.

  • Yes, very true. This is another good point along the lines of the comment thread we had last week about entrepreneurs and marketing. Just because you have a good idea or innovative product, it doesn’t mean you will succeed! You have to think through the reactions of competitors and build that buffer of protection. “Innovator arrogance!” Fantastic comment Laura. Thanks!

  • Even old school AAA has a full suite of mobile apps! Favorite line – possibly ever – “what’s the ROI of bankruptcy”. Might just have to add that to my list of objection responses.

  • yeah, probably should have made that the headline, right? i need to consult you before every blog post! : )

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  • We can never underestimate the power of fear. Fear of change. Fear of the unknown. Fear of taking a risk. Fear of disrupting the things that were once successful. It’s a powerful thing but we have to fight it.

    Peter Drucker once said, “Whenever you see a successful business, someone once made a courageous decision.” The opposite is usually true too. Whenever you see a failing/failed business someone probably wasn’t willing to make a courageous decision.

    Thanks for a great post Mark. I’m sharing this!

  • Philip_Cummings

    I like this post, Mark. As a teacher, I’m thinking about the application of this to schools, both public and private. Many educational organizations has been resistant to making changes and embracing modern technologies, but then again, traditional (industrial style) schooling has been such a universal experience that most parents expect their children to be educated in the same way they were. We haven’t yet reached the point where parents are demanding local schools join the 21st century, but I have the sneaking suspicion many of our schools are going to find themselves in situations similar to Kodak and Rand McNally.

  • James Ulvog

    Good question. Can I expand your question
    to three options?

    Which of the following is best approach
    and which is worst?

    Which of the following is best approach
    and which is worst?

    1. No digital presence.

    2. Bad digital presence that was
    put up because you ‘have’ to do something in the social media space and after
    getting something on line you quickly move on to the next thing on your ‘to do’

    3. Bad digital presence that you
    put up because you ‘have’ to do something but you don’t really understand so
    you did something to get started as you try to figure out all this stuff so you
    can improve over the next few months. Oh, and you read blogs from Mark and
    others to help you get a clue.

  • James Ulvog

    Oops. Sorry for the repeated sentence and clicking the up vote and down vote. I’m still learning how to drive Disqus.

  • I had the pleasure to hear Jeff Mayersohn, owner of the Harvard Book Store, speak the other night. His passion for books coupled with his relevancy to readers was a wonderful story. As he spoke about first Amazon’s website, then the emergence of the Kindle and Nook, he was able to offer comparable solutions to his audience without sacrificing what he believed in – the written word on paper. Now considering Rand, I wonder how they could have done the same. If they believed in maps in the traditional sense, is there a way they could have made them work alongside existing technology? How could they cater to both those that read maps (people still do!) and those that need something more relevant and accessible?

  • Marketing needs to increase shareholder value. If your “ROI spreadsheets” have you taking a path that leads to insolvency and bankruptcy, your sense of ROI is WAY to limited.

    Digital marketing, and the ability to “measure everything”, has hooked marketers on very direct, linear measurements. Doing X drove Y. Marketers have moved away from looking at driving bottom line results at the business level and over the long term.

    The result, in part, is “successful marketing campaigns” that do not ultimately create successful companies. It is a big problem in marketing today and it seems to just be getting worse.

  • No worries. It’s the thought that counts. Thanks for adding to the conversation!

  • Many thanks for sharing your wisdom (and Peter Drucker’s!) Bill!

  • Boy you have touched a hot-button here (as you know!) Yes this is VERY applicable to slows but the problem is, instead of getting feedback or having a company fail, we keep propping up lousy public schools with more money! And the “feedback” may not come back to us for decades as we slip behind in the world marketplace. Thanks for revving the engine Phil : )

  • Yes, exactly. They missed the business they were in. Instead of making maps, they needed to know they were in the business of getting people to their destination. That opens up a lot of possibilities, doesn’t it? Thanks!

  • This is a very difficult subject. How does a company decide on what needs to be driven by ROI and what is driven by “table stakes” — something needed just to stay in business. It is easy to look at these businesses in hindsight and be critical but it is very complex to fight momentum and years of success to strike out on a path of reinvention. Tough stuff. Thanks for the superb comment Eric!

  • Mark, I would propose a slightly different (and I believe far more accurate, however more difficult to measure) definition of ROI for the discussion.

    Return is the difference in your business between making and not making the investment. This could be cash or profit over a period of time, or it could be business value (which implicitly includes an estimation of the long term).

    Looked at this way, the ROI of table stakes initiatives becomes much clearer. Of course, knowing what tables stakes will be in two years is far more difficult, and that’s where you are pointing at Kodak and Rand McNally as missing the boat (and I agree).

  • Pavel Konoplenko

    Excellent post. A point I’ve made before is that the generational gaps are contributing to the over-reliance on outdated ROI metrics. Technology has sprouted so fast that many executives in companies like Rand McNally didn’t really understand the power of digital. I believe they simply were against it and used ROI as an excuse to not get involved. For many people in my generation, we don’t think about the ROI of digital because to us, it is an inherent natural part of life. I’m sure when the execs at Rand McNally weren’t sitting and calculating the ROI of telephones! I think many of the problems stem from a lack of adaptability and fear of adoption.

    PS: The ROI of bankrupt is the invaluable lesson for future entrepreneurs and business leaders!

  • Pavel Konoplenko

    Excellent comment! I have so much criticism of today’s schools. The education is VERY slow to adapt and the problem is because there’s so much money involved with education – textbook industry, politicians, union leaders. When money is on the line, those in power are afraid to change anything.

    My younger brother is attending the same elementary school as I did in Brooklyn, NY and the curriculum and structure are virtually the same. However, society has changed a lot between my time and his. It’s disappointing to see that the schools haven’t changed.

    I think education is overdue for a massive shift in the next decade.

  • Pavel Konoplenko

    Interesting question. It really depends on what you define as “bad.” If bad means being unresponsive to customers and publicly not listening to them, then I think a company is better off with no presence until they figure out how they begin listening. If by bad you mean not creating a lot of content or maybe not integrating their offline and online efforts, then it’s better to have bad over no. Simply because the best way to get better is to keep trying and seeing what works and what doesn’t. A company committed to improving will not have a “bad” digital presence for too long.

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  • this is a really terrific post around a very good story. I totally agree that having a website is no longer enough. Some businesses are even going mobile first so there is a tremendous change already ongoing. I think regardless of what the business is, you need to be tuned into the social conversations and involved in the Web 3.0 or the social Web (which I think is a better term).

  • I agree with @businessesgrow:disqus – this is a very hot button issue but a very important one. The school boards seemed to have for the moment hijacked this process which is why it is very slow to change.

  • I guess where I was coming from is, I’ve worked in big companies and I know how hard it is to make an elephant dance. Even if I knew what to do and what was stake, even if my vision was right, would I have been able to do any better. I don’t know and never will, but I appreciate that challenge they had.

  • Oh I am so frustrated with this too. Don’t forget the unions and school boards are just trying to keep the status quo in place. Great observation Pavel.

  • As Pavel notes, this is really a spiderweb of bureaucracy. I think real change will have to be led at private schools for the near-term.

  • You add so much to this blog Pavel!

  • I guess I should clarify or emphasize that ROI is important. It may be an old-fashioned notion, but it is still relevant and If you don;t make a profit on the money you invest in a business over the long haul, you will no longer be a company or have a job.

    However I think (in fact, I know) that some managers hide behind “ROI” to avoid change, to avoid making a decision. That’s what I think happened in theses cases and that’s when we need to sound the alarm!

  • Very well said Abdallah. Many thanks for this keen observation.

  • This is such a great point Mark. Reminds me of that line from Other People’s Money (Danny Devito) — something to the effect of it’s not good to get an increasing share of a shrinking industry. When the competitors start dropping off, the ROI goes up for those that remain standing — for awhile. Then the demand curve eventually falls on their head.

    As you said in the post, you just have to wonder what kind of discussions were happening in the C-suites of these companies as their products were rapidly being replaced by digital alternatives.

  • See my response to Eric below. These blunders seem obvious now, but could you or I have made a difference if we were in the hotseat? Would we have been effective turning the ship around? I don’t know. Bureacracy is a status quo monster. What do you think Adam?

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  • ie: RIM? They have a great digital “marketing” strategy and lot’s of really smart people but didn’t pay attention to what they heard/saw. I think what you are talking about here is more of a digital product strategy as much as a digital marketing strategy. Even if Rand had deployed an effective digital marketing strategy, their product wouldn’t survive anyway.
    Really, what you are talking about is the ROI of vision versus the ROI of status quo. It’s been an issue since the begining of the economy. Those that had it survived, those that didn’t, well, didn’t. The biggest challenge as things progress is that the changes happen so much faster than ever before.. But, here’s a visionary statement, just know that things are going to continue to accelerate at an exponential pace so if you think this is tough, give it a couple of years.
    Great post, Mark!

  • I wonder what the ROI of bankrupt is?”


    Let’s put another check in the “L” column for Business as Usual.

    Thanks for the great example.

    Ryan H.

  • Thank you Mark! That means a lot

  • Awesome post, not to mention some gems in the comments thread below! I can’t recall if it was Chris Brogan or Gary Vaynerchuk that said something like: “What’s the ROI? Still being in business in two years!”

    Kodak and Rand McNally are great examples, just like RIM or how the music dismissed online solutions when they came up to eat their lunch, and iTunes revolutionized the game with its one-song purchase.

    I was giving a speech no later than yesterday and it got heated specifically when someone questioned the whole ROI of being active on social media. Indeed, it’s a tough topic to handle, and metrics can be hard to come by to satisfy the C-suite, but it usually boils down to demonstrating that social media is not just about sales, but also customer service, HR, advocacy & public affairs, PR, events and so on. And for all of these fields, there ought to be metrics in place to help making the ROI case for being active in social media.

    And even then, it all boils down to relevancy. Which is a tougher nut to crack or demonstrate on an excel spreadsheet… 😉

  • It’s very easy to fix all of these things in a blog comment section. 🙂 We’ve talked about big company reality before. You make great points to Eric. I would add that for a public company with quarterly earnings to make, it is almost impossible to say “we would like to quit making so much money now, so we will still have a business in 5 years.”

    A private company has a shot, but only if the leader sees it — and the bigger they are, the harder it is. Big companies just have too many stakeholders with differing agendas.
    You think the head of film manufacturing for Kodak was onboard for
    shifting to digital?

    “Bureacracy is a status quo monster.” So true, and when times are challenging, there is even more inclination to take the safest short term path and stick with the status quo.

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  • Great post Mark! Ultimately though this has nothing to do with technology, marketing strategies (digital or otherwise) or “generational gaps” – enough of those already!

    Of all the companies I have ever worked in or helped that faced challenges, they ALL knew the problems they were facing AND the answers. Not one of them didn’t have the ingredients to succeed or get our of the rut, to re invent or innovate.

    The problem? In a word, leadership. The people that have the answers, understood the problems and had the appetite (and capability to change it) were not at leadership level. Managers and more often that not, fornt end employes knew exactly what to do. But the execs sitting in the ivory tower, gathering round the table and fretting over that cancerous number – earnings per share – were totally oblivious.

    Denial is a trait that transcends technology or marketing strategies. It is simply the technology, marketing strategy or innovation of the moment that highlights this rather unfortunate trait.

    The really good news is that this time round, for the first time, the technology is making things way more transparent, giving the customer and perhaps more importantly the average employee (one and the same) a voice that cannot be ignored.

    Agree with Frederick, some good comments too!

  • Hey Mark, I have read through all the comments and wanted to add something. I hope you can indulge me for a minute here. First off, I am not a social media marketing guy but I am a humanist and I truly believe that social engagement in business is a viable course of action.

    Since the landscape of technology keeps changing so rapidly how can a business stay ahead of the curve? “Always Be Innovating” somehow has replaced “Always Be Closing” (thanks Glengarry Glen Ross) which is exactly what your examples did not do, however, if innovating is now table stakes, as it should be, then what is missing or maybe simply not touched on specifically is “engagement”. The fact that there are “apps for that” is no longer going to be enough either is it? Mapquest has be outdone by Google and the cycle begins. It doesn’t much matter whose product it is because there will always be something newer, faster, better. Is that not the nature of our world now?

    I agree that the trouble is the decision makers needing to become the innovators and for some reason it seems like that will always be the primary issue with companies that have existed through the technology boom (if I can call it that). Now mobile is the biggest deal and rightly so.

    At the end of the day as a consumer I no longer want to be dictated to. I want to engage with a company and if I cannot do that I will go elsewhere. Now, I am an old guy and I am quite confident the younger folks out there seek more in terms of engagement than I ever will.

    How do you measure the relevance of that?

  • Agree. The rate of change is accelerating. Hold on! Thanks Steve!

  • Thanks Ryan

  • Lots of interesting points here. Let me pick up on a few.

    That comment about social media saving a business — I actually hate that quote. It is usually repeated by people who have never really been in business. Few businesses are going to be saved or elevated by a blog or Twitter account. Yes, you need to stay relevant but let’s not lose site of stuff like competition, cost, quality, etc. Any of those can kill a business faster than an inactive Twitter account.

    Another point is that you’re right. A lot of the value of social media cannot be captured on an excel spreadsheet. We have to look at qualitative benefits was well as quantitative. Not always easy for a large company. Thanks for the great comment.

  • Amen. Nothing more I can really add other than to say i agree!

  • Engagement is a two-edged sword. Engaging for the sake of engaging is called “annoying.” It’s really about building trust, solving problems and being helpful. That’s the way we have always wanted to deal with people and businesses. Those are the basics. As long as we keep that in mind, I think we’ll be OK : ) Thanks for commenting Ralph!

  • I would agree for any commodity business or service model.

    However, in customised service businesses, especially in B2B markets this is less true.

    The key difference being whether true personal engagement is needed or just a superficial voice facade as a proxy for it. So if you are buying a car – you could do it over the phone – For something truly client specific and valuable say getting a baby delivered – not so much !

  • Thanks for adding to the conversation James.

  • Wow, what a great case studies, Mark. I have nothing more insightful to add…other than I intend to share this across my networks. Adapt or Die, folks!

  • RogierNoort

    (Sorry for the late reply) I would have to say that a bad presence is worse than no presence because it can do more harm than good, especially as far as reputation goes.
    For those who are not to eager to join I would advise a minimal approach. Find one platform where your audience is and stick to only that.
    Mind you, Apple doesn’t have a ‘social’ presence and is doing quite well…

  • RogierNoort

    No worries.., thanks for the challenge…

    Assuming here that ‘bad’ represents ‘not well done’, because that’s OK, most of us started out that way. ‘Bad’ as in ‘damaging’ should always be avoided…

    As mentioned below.., I would have to advice (now written with a C).., to do nothing if you don’t want to (although that is not wise).
    If you choose to engage, start with reading “blogs from Mark and
    others to help you get a clue”, find your audience and then baby steps all the way to a successful relationship with your audience.

    So, from the above choices, I’d pick 3.., but always be careful.

  • RogierNoort

    Thanks Pavel .., the first option should be avoided at all costs, nobody benefits from that.
    The second option is OK.., one can always improve on a bad strategy.., but it is very hard to recover from a bad experience.

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