Helen Curtis: ROI is dead. Or it should be.

In this opinion piece, founder of vendor-agnostic partner forum Coterie Community, Helen Curtis, shares her view on how partners could reconsider measuring growth

ROI is often the sole measurement of success and yet value creation plays a huge part in company growth, so how can we start to recognise this?

"Yes, but what's the ROI on that?" It's a well-worn phrase that's likely bouncing off boardroom walls around the globe as you read this.

And it's been that way for almost a century since the measurement practice was first coined in 1914.

Clearly, the corporate world looks very different now, so why are we still measuring our businesses, our teams and our budgets on such an outdated, antiquated practice?

It's time for a change.

The biggest problem with ROI is that it's an economistic concept - it only measures the financial aspect of a deal, campaign or initiative.

But as partner marketers, we all know that achieving business growth and boosting sales is an iceberg; the part you see (and measure with ROI), is only a fraction of the activity and time that goes into winning any deals.

It's not that ROI isn't useful - it's a highly effective way of measuring a tangible financial outcome. The challenge is that it shouldn't be the only tool we use for measuring success.

There is a multitude of other non-tangible, soft benefits - such as brand awareness, influence, engagement and reach - that contribute to winning every single sale.

Speaking at a recent Coterie Community event we held in London for around 40 partner marketers, Hannah Jenney, Head of Marketing at Exclusive Networks UK and Ireland, said: "We need to be able to articulate the intangible value that channel marketing delivers.

We know it's effective, we know it's why relationships build and margins grow, but if we measure it purely with ROI we don't capture reality."

The room concurred. ROI was the hot topic of the day and with good reason; the value that partner marketers are delivering to the business is being lost in our race for fiscal achievement and measurability.

Professor Shona Bettany, Professor of Marketing at Huddersfield University, summed it up perfectly: "ROI is the old economic adage of knowing the price of everything, but the value of nothing.

"ROI doesn't consider the complexity of actions that go into making a successful brand and business. There is a complex web of activity that incites customer engagement that leads to sales and growth," she said.

So, what's the alternative? Value From Investment.

Lily Lazarevski, Senior Global Channel Marketing Manager at Infoblox, explained: "Growth is about more than just ROI. Value From Investment considers both financial and non-financial benefits, which provides a more holistic understanding of total investment.

Value, though not easily measured, contributes heavily to an organisation's performance and drives long-term results."

The challenge, as Lily said, is how to measure these value-based achievements alongside traditional ROI.

Unsurprisingly, the partner marketers at our event had some thoughts on this. Many agreed that we need to change our thinking around value, goals and remuneration if we're to start recognising these softer values.

The first point raised was that measuring value is not a short-term strategy.

Achieving brand awareness, reach, influence, and understanding the value of partners in the ecosystem are all slow-burn activities that require consistent messaging, regular attention and a ringfenced budget.

Another key area we discussed was the need for shared goals and recognition for value creation. One community member cited a great analogy for the challenge we face.

Think of a business like a steam train - everyone puts in the coal to make the train move. The question is does it matter who puts the individual pieces of coal in? Or, is what matters the fact that no one stops doing it, otherwise the train will eventually stop.

Professor Bettany said this is key to understanding and measuring value: "Not every single piece of coal that you put into that engine is going to be directly measurable in terms of its value, but the train will keep going.

"We need to develop a more qualitative, deeper understanding of how value is being created within an organisation. Some people are value generators just by being in the business because of their knowledge, experience and contacts.

Recognising the value within an individual is vital. Businesses have become too spreadsheet and metric-oriented and instead need to listen to the value stories."

The Coterie community agreed that Value From Investment should be included in shared KPIs between sales and marketing teams to ensure everyone is driving towards the same goal and vitally, being recognised for that.

Lazarevski from Infoblox added: "ROI and VFI are both important metrics for assessing the profitability of investments with channel partners and only by considering both, can we go beyond the concept of simple profit maximisation, to consider a more holistic and long-term measure of profitability and the wider value impact of our investment."

Having a management team who respects and understand this is crucial to success, and perhaps this should be considered a stronger metric than ROI.