Presentation by Melissa Rach at Confab and CS Forum.
Dinero. Dosh. Dough. Dollabills. Like it or not, money plays a role in every content strategy project. As content strategists or practitioners, we need to be prepared to answer questions like:
- How much does a content strategy “cost”?
- Why should I fund this content strategy project?
- How do you define the value of content for an organisation or client?
- Can you prove ROI for content or content strategy?
In this session, we’ll discuss the complicated relationship between content and cash. Then we’ll focus specifically on the conversations you need to have to scope, price, and prove the value of content strategy work. Cha-ching.
2. I am two people.
Johnny is the nice one.
Cash causes all the trouble.
—Johnny Cash
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3. Business expectations
To make an investment, organizations expect:
• To know exactly what our product is
• Proof of competency/quality
• Exactly how much it will cost
• Provable value and ROI
Hard numbers. Right now.
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5. We can do it
• We know content work is valuable
• We know content is a benefit, nay necessity, for
businesses
• And the business world is catching on, too
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10. Decision making is scary
Investing in content:
• Means NOT investing in other things
• Might result in loss of:
• Money
• Time
• Other opportunities
• Professional reputation
• Emotional anguish
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11. And hard…
People:
• Are limited by what they know
• Latch on to things that are familiar
• Take their best guess
• Often play it safe
• And then immediately start worrying that they’ve
made the wrong decision
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13. Content breaks all the
economic rules
• Things of value are usually
• Exclusive
• Transparent
• Hard to replicate
• Endless supply AND endless demand
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14. “Content strategy” is a
service
• “New” industry
• Very diverse
• No obvious accreditation
• Doesn’t fit nicely into a traditional business
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16. As far as the laws of
mathematics refer to
reality, they are not certain;
and as far as they are
certain, they do not refer to
reality.
—Albert Einstein
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17. Measurement is…
A set of observations that reduce uncertainty where
the results are expressed as a quantity.
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18. Exacts are impossible
Numbers reduce uncertainty:
• Approximate values
• Shortcuts for the brain
• Common vocabulary
Think about numbers as a communication tool.
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20. 1. Do your homework
Get all the information you can, find out:
• What is the decision?
• What impacts that decision?
• What else do you need to know?
• What experience do stakeholders have with
content?
• Is there a budget?
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21. The goal:
Make a confident decision that’s beneficial to
everyone.
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22. 2. Narrow down the need
What’s the buyer buying?
• Good or service
• Service
• Strategy
• Planning
• Designing products or processes
• Implementation
• Creation
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24. 4. Understand all benefits
and costs
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Type Benefits Costs
Monetary Profit or savings Cost of creation
Sensory Get satisfaction/
alleviate pain
Endure extra pain or
reduce satisfaction
Temporal Save time Lose time
Opportunity-based Gain advantages Eliminate possibilities
Psychological Reduce anxiety Add anxiety
Social Increase stature Blamed for problems
Convenience-based Makes things easier Makes things more
difficult
25. 5. Tell a hopeful story
Create a story that highlights key benefits, such as:
• We can serve users better
• We can be more efficient
• We can beat the competitors
• We can be more accurate
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26. Brand it, test it, believe it
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The Content Efficiency Initiative
Better for the front line
and the bottom line
Buy making our intranet content more
accessible, we’ll save hundreds of
headaches and hundreds of
thousands of dollars….
27. 6. Eliminate fear
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• Discuss the details
• Plug information gaps
• Address concerns
• Start small or do some proof of concept work
• Provide references (services) or samples (goods)
• Be patient
35. Content as influence
What is the piece of content worth?
• Benefit: Increased profit as the result of an end-
user behavior change
• Cost: Cost to create the content
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36. Estimates, not exacts
Figure out what you know; fill in the blanks with assumptions
• The average Johnny Cash t-shirt costs $20
• Analytics show that 50 people start the process of purchasing a t-shirt online
every day, but only 10 finish the process
• User research shows that the instructions on the purchase pages are very
confusing
• We assume 5-10 people leave the purchasing process because of something
unrelated to the site, and 5-10 leave the process when they see the shipping
costs
• We assume the remaining 20-30 people would complete the purchasing
process if the instructions were more helpful
• Therefore, the value of the instructional content is likely around $144,000-
216,000 per year ($20 x 20-30 people x 30 days X12)
• The cost of fixing the content is approximately $5,000
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38. Efficiency tool
What is the tool worth?
• Benefit: Cost savings as the result of employee
behavior change (or happiness)
• Cost: Cost to create/maintain the tool and train
people to use it
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41. Strategy (or service)
What is the strategy worth?
• Benefit: Combination of:
• Savings/profit from:
• Content as product
• Content as influence
• Tools
• Sub-services
• Value of non-monetary benefits
• Cost: Cost to create/implement the strategy
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43. Everything is worth what the
purchaser will pay for it.
—Publilius Syrus
(1st century BCE)
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44. Ways to price
You can base price on:
• Cost
• Competition
• Demand/value
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45. There are a lot of good
economists, but there is only
one Roger Clemens.
—Robert Solow
(1987 Nobel laureate)
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46. Estimating probable results
Basic project information:
• Maximum gain: $216,000
• Maximum loss: $5,000
• Chance for success: 70%
Expected opportunity loss:
• Risk of approved: $5,000 X 30% = $1,500
• Risk if rejected: $216,000 X 70% = $151,200
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47. Pricing basics
• Give ballpark estimates early
• Estimate on time, price on value
• Aim for a consumer surplus
• Always provide numbers in person
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48. Price is like setting a screw. A
little resistance is a good sign.
—Harry Beckwith
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50. Our friend, Johnny…
Stats
50+ million albums sold
Created:
96 studio albums
63 compilation albums
153 singles
Honors
17 Grammy Awards
9 CMA Awards
Rock and Roll Hall of Fame
Rockabilly Hall of Fame
Songwriters Hall of Fame
Gospel Music Hall of Fame
Country Music Hall of Fame
Nashville Songwriters Hall of Fame
Kennedy Center Honors
National Medal of Arts
Hollywood Walk of Fame
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59. Want to know more?
Content Strategy for the Web (second edition)
Check out chapter 10
By Kristina Halvorson and Melissa Rach
How to Measure Anything
by Douglas W. Hubbard
Marketing Professional Services
by Philip Kotler, Thomas Hayes, Paul N. Bloom
Naked Economics: Undressing the Dismal Science
by Charles Wheelan
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Hinweis der Redaktion
NameTitleAuthorColumnist
Talking about money is awkward and uncomfortable in most situations It’s even harder when you’re trying to pin dollars to something as amorphous as contentMoney is an important part of any industry—we need to eat
People aren’t asking us for this stuff to be jerkfacesThey’re asking because they think that is the way business is “supposed to be done”
Let’s face it. This stuff was never the content person’s forte. Two things I didn’t think I’d ever use computers and economics. Gross.
Everybody wants to fix this problem, solve this puzzle – we’re all problem solversYou are in just as good of a position as anyone else to do it Most people are economically illiterate -- 7 out 10 execs I’m not saying it’s going to be easy. Or quick. It’s not. But content is important. And it’s our jobs to figure out the question.
Cue Johnny picture
But we can learn from Johnny’s attitude He knew he didn’t fit the mold, and he knew he couldn’t play by the rules Yet, he went on to become one of the most successful performers of his generation He did it by being equalparts genuine, wiley, and rebel He figured out how the system worked, and he then he used it to his advantage We can be rebels Getting educated about economics We can rebel against the conventional concepts economicsWe can find work-arounds
People and businesses want to “maximize utility”: Make themselves as well off as possible Maximize pleasure/comfortMinimize risk Trade offs – being a poor grad student so you can have a better life later Doing this talk because content is important Also want to keep my job, sell books, get clients There is short term and long term utility It might feel great to flip off the client, like Johnny Cash, but the long-term utility is not a good trade off
They have to trade off things they already have and like, or things they wished for – when the frig breaks down, your new tv plans are gone…MoneyOther ops: If I spend time on this, what else am I missing? Time: Waste time on this project and could be farther behind Professional rep: You hired these people, you’re responsibleEmotional anguish: Don’t want the whole thing to be painful
People guess based on: Rules of thumb/short cuts ExperienceCommon sense We do this all the time Looking at the sky for the weatherFlying vs. motorcyclesPlay it safe -- McDonalds, late, screaming child in the back
Dorky kid, we musicians were starting to need polish Grew up in the cotton field Mom made his clothes Had an ok voice, but not greatGot a $5 guitar in the army
Perfect storm of economics crappiness
People have no idea what we doHave nothing to compare us to No past experience to draw on
Numbers:Business runs on numbersShortcut for the brain – hot outside vs. it’s 80 degrees All sort of arbitrary 14C/60F It doesn’t need to be exact, in fact, it hardly ever is New Coke Most people prefer new Coke to old Coke5 out of 6 people prefer new Coke to old Coke83.3% of respondents prefer new Coke to old Coke Whoops
It’s not about us against them, as long as procurement isn’t involved It takes: Listening Sharing TimeDon’t start with money. Give a big ballpark range.
Do you need a plumber or a pipe Why do you care? Because they are valued differently Let’s say you have a pipe burst in your house The pipe itself is worth $2The work of the plumber who fixes the leak is worth a lot more even though you can’t quantify piece of mindAnd buyers expect different amounts of information during the serviceGoods are just the price of the manufacturing, and the profit margin Pricing services are hard
I am often ready to spend extra money for convenienceThe value of a content strategy -- depending on the combination of these qualities. You want it fast, alleviate all the pain? Different from a long time line and focusing on one pain point
This is about storytelling
So the real questions are: Value of what? What’s a benefit? What’s a cost? Let’s look at the comparatively easy one
Are you estimating or measuring progress?
ChallengesProjecting the market value of the product (price people willing to pay or do without) Remembering all of the steps in the content creation process
Calculated by hourly rates , percentage of time spent on this task, and time saved during the yearDon’t forget approvers
Price changes depending on the circumstance, not just in content but for everything A personal trainer is worth $100 per hour to Becky, by $40 an hour to Brian If you are walking through a desert and you see a guy selling water for $20 are you getting ripped off? Vending machines that automatically raise prices in hot weather But still, we’ve had prospects get upset because I won’t give them the magic equation. So, here it is – the big reveal of the magic equation for the value of content
Cost – how much does the work cost us to do + profitCompetition—based on competition, higher or lowerDemand– value = benefits-costs
The market is amoralDiamonds are a luxury and they are expensive, water is cheap but is a necessity We know content is good, but price: Isn’t related to it’s social valueIs related to scarcity Don’t make a soap box, make your service or content scarce.
If you give a client a slap and the face and estimate and he complains about the slap, your price is to low If the client asks you why your price is so high, don’t cave – it’s an opportunity to sell yourself20 % resistance is good. 10% will always haggle, 10% will have budgets that you’ve exceededWorld champions in baseball only have to win 57% of games
But we can learn from Johnny’s attitude He knew he didn’t fit the mold, and he knew he couldn’t play by the rules Yet, he went on to become one of the most successful performers of his generation He did it by being equalparts genuine, wiley, and rebel He figured out how the system worked, and he then he used it to his advantage We can be rebels Getting educated about economics We can rebel against the conventional concepts economicsWe can find work-arounds