ROI: Radio On the Internet? No; Return on Investment
Understanding ROI is a key driver for success; but don't count early victories as evidence of a trend.
"Maximize Return on Investment!"
ROI, or Return on Investment, might as well be a meme at this point. It's found its way onto job descriptions, resumes galore, and is often thrown around by otherwise well meaning people who don't necessarily understand how to identify signal from noise. Chasing and refining ROI can often be difficult, and many companies can fall into the trap of overestimating momentum. Here are five points to keep in mind when measuring the success you're building for your business.
1. Not Everything is an Opportunity
If you're just starting out in your business, it can be easy to get excited. Reaching out to new people, gaining new Twitter Followers, or expanding your LinkedIn network can all be very good drivers to keep you going day to day. It's tempting to think that you need to immediately start trying to monetize your newfound network, and you start trying to line up conversations. But there's a key pitfall many people don't recognize when they're first starting out; not everything is an opportunity. Just because you have a phone call with someone, or a retweet, or a direct message, doesn't necessarily mean that these people or companies will convert. Further; it's good to keep in mind that a lot of the times the person on the other end of that conversation is more than happy to talk to you about a service that they themselves provide, whilst ignoring your pitch all together. Spending your time chasing unicorns can quickly turn into chasing the dragon.
Be wary of people who are only out to schedule meetings with you because of the services that they provide. A lot of times there may be an opportunity for partnership or a working relationship, but that needs to be a mutually beneficial conversation before anything is to turn into an opportunity.
2. Starting to Work != Working
This point is absolutely critical to keep in mind. Early successes are not necessarily an indicator of a trend. Yes, a new contract, or customer, or contact point, or response to an ad is a promising prospect, but as we discussed; not everything is a lead. Just because something is starting to work doesn't necessarily mean that it's working in the long term, or even that its the right business model for you.
Know that your early successes are just that; early. It can be difficult to tell what's plain dumb luck versus the result of consistent hard work. The worst case scenario of this is people who may find early successes and begin to rest on their laurels, thinking that they've hit a good pattern and things will carry them along and the business will grow. It may sound unthinkable, but it's a potential reality that you'd likely do best to avoid.
3. Early "Momentum" Defies Physics
This is especially true for early stage seedling stage companies. An object in motion tends to stay in motion, right? Wrong! What you have to understand about the business world is that while yes, it can be true that the momentum you are building is crucial to your long term success, gravity and the laws of physics have nothing on the forces working against you in your chosen arena. For every one of you, there are thousands out there like you all vying for the same business. Just because you got a piston to fire doesn't mean your engine is running.
Instead; focus your time and energy on relentlessly swimming up stream. Keep building that network, keep writing, optimizing your site, finding new opportunities, new venues to expand into. Keep talking, keep going, keep listening, keep doing good work. It can be easy to lose sight of what you're trying to accomplish by taking pride in your early successes, but you need to keep going. You need to keep putting gas in the tank in order to keep that engine running; so never stop putting the pedal down.
4. Signal from Noise
This goes along the same lines as our original point; not everything is an opportunity. However, identifying "Signal from Noise" applies to a wider theory than simply identifying opportunities correctly. You could see a few real opportunities as a signal of a trend, but the actual trend in your industry can be a much better indicator of where you should be going versus the direction you're currently heading. For instance, in mobile development, just because you get a contract for an app built on Objective-C doesn't necessarily mean the trend is heading in that direction; especially when Swift is the new language getting all the attention. Swift is the future; Objective-C the past. Maximizing your ROI becomes much easier when you can correctly identify trends in the industry. This is especially true of something like Search Engine Optimization, where the game is constantly being changed by Google, Bing and other search engines. What worked yesterday may not work today, so don't focus on yesterday. Make sure you identify the signal from noise and focus on what's going to work tomorrow.
So that's all for now; a few quick tips to help you maximize your radio on the.... I mean Return on Investment. It's crucial to understand market trends, determine what's working and what's not, and realize that market forces are most likely against you until they're not, and it's up to you to know when they're not.
Stay vigilant; it's a jungle out there.