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return on time ROT marketing metric

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Communications professionals typical consider return on investment (ROI) as the ultimate metric for measuring their PR and marketing campaigns. Some experts, however, recommend dropping ROI in favor of return on time (ROT), or at least including staff time in PR and marketing measurement calculations.

While largely unknown, ROT provides better measure of PR and marketing, especially in digital and social media marketing, argues marketing expert Jacky Tan. A company may increase its investment in marketing and advertising and then see an increase in sales, but the increase in spending may not necessarily cause the sales increase, Tan writes in Business2 Community.

While the standard ROI formula is return equals net profit divided by total investment, ROT replaces the ROI formula’s investment with time. In addition, return in the ROT metric means the number of leads, prospects, online enquiries and social media leads generated from each marketing strategy, explains Tan, who says he coined the term. A high ROT means the organization should consider investing more time in the particular tactic. A low ROT suggests decreasing time spent on the tactic or re-evaluating personnel involved in the task.

Entrepreneurs and business managers use the metric, also called return on time invested (ROTI) to learn where to best spend their time. It’s expressed as the hourly return on an activity. If you spend $200 on new domain registrations at GoDaddy and spend five minutes searching the internet for a discount code that saves you 20% on the total purchase, your ROTI on that five minute investment is $480 per hour, explains Fastlane Entrepreneurs. The savings equals $40 ($200 X 0.2). Expressed as an hourly return, that equals $480.

A Metric to Increase Staff Efficiency

“By better allocation of the marketing strategies and limited budget, the company therefore saves more and gets more,” Tan says. “In this way, the marketer can have the extra time and money to spend on more branding strategies to further grow the brand to the next level.”

The metric helps brands adjust their marketing strategies over time, as particular marketing strategies rarely remain successful over the long-term, he points out.

When marketers measure their content marketing program’s performance, they tend to focus on a hard ROI. While that’s incredibly important, it doesn’t tell the whole performance picture. Marketers often fail to measure ROT, agrees Michael Marchese, CEO of Tempesta Media LLC.

They also don’t measure the opportunity cost of investing in one marketing program over another, Marchese says.

Marketing teams may require several hours to implement, manage and analyze a marketing program, he says. Those are real costs. If there are solutions that can make a content marketing program more efficient and require less internal time, they should also measure that important metric.

The Question of Staff Time

Some communications teams wonder if they should include staff time in the investment when calculating marketing ROI, says Jill Avery, a senior lecturer at Harvard Business School

“The MROI (marketing return on investment) of social media activity often looks very high if you only count financial resources, but if you look at the human resources required to develop content and respond to consumers’ posts 24/7, the number goes down,” Avery told Harvard Business Review. “In principle, managers should try to estimate the full cost of the marketing activity, including creative development, media spend, and customer-facing staff time.”

Bottom Line: Return on time (ROT) is a valuable PR and marketing metric. Many PR and marketing teams remain obsessed with return on investment (ROI) and forget to include staff time when judging effectiveness of PR and marketing campaigns. Even if companies focus mainly on ROI, it’s essential to factor in staff time when calculating ROI.

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