The true ROI you should be measuring
The Old Fashioned ROI
Business is a numbers game. We use numbers as the best way to keep score of how well we are doing. Accountants have a bunch of industry-specific phrases, aka jargon, they bandy about all the time. Balance sheet, cash flow, assets and profit, and loss statements. When we assign a particular amount of money and then track its profit we call it a return on investment. In its simplest format, this one is easy to measure. You spend $1000 on a marketing campaign and you generate 20 leads, convert 4 of them who each pay you $500. Thus your ROI is $1000. Simple to understand. You could get more complex. Work out how long it took you to develop the marketing, follow up the leads and service these clients. Coming up with an hourly ROI. So if all this activity cost you 10 hours in time spent then your ROI is $100 per hour.
The 21st Century ROI
We now live in the information economy. The geographical limitations of many peoples IP (intellectual property) has no restrictions. Having specialist knowledge and business intellect needs a new measuring metric. I call it a Return On Intellect. Most experts make the same critical mistake. Picking only one mode to deliver their expertise through – and then sticking to that. Accountants make money through accounting. Trainers make money from training. Chef’s cook. You get the picture. This way of thinking is outdated. The secret to having a better ROI is to diversify how you deliver what you already know.
Boost Your ROI
To increase your revenue you don’t need to learn new information. Only how to package up your existing IP and deliver it in multiple ways. Just as relying on one big client is often fatal to a business, relying on one revenue stream for your IP is also risky. Well known entrepreneur author Dorie Clark labels it as “a portfolio career”. Think about all the ways your knowledge and experience could be delivered. Books, consulting, speaking, teaching (Mastermind groups), coaching. There are numerous ways to use what you know and also additional benefits. The more services you can offer your customers, the more opportunities you have to increase their loyalty, by satisfying as many of their needs as you can. That’s a great competitive advantage. A Unique Selling Point. However, the biggest advantage is that you become an authority in your field, thus increasing your ROI even further. It becomes a self-fulfilling loop
Knowledge Lost Forever
My in-laws recently retired after 35 years as professional photographers. I tried several times to explain the idea of creating a teaching model around all their valuable experience. Every tip, trick and shortcut that made the photographs, and their clients, look amazing.
Sadly they couldn’t see how valuable their information was. Instead, they have taken it into retirement with them. Lost to a budding generation of photographers. Photography studio starts ups who could quickly learn how to run a successful portrait studio.
So ask yourself the tough question. Is all the experience (including mistakes), knowledge, and information of what I do or how I do it, giving me a great Return On Intellect? If the answer is no, then look at the additional ways you can deliver your intellectual property to create an extra revenue stream.
Ronan Leonard teaches niche leaders and subject matter experts how to package up their IP into high-paying Masterminds (Group learning)