The Cost of Inaction 7/31/2012
It is easy enough to measure the rise and fall in existing sales as many business leaders labor over current sales data. Even more energy is put into forecasting the future months to guide capacity measurements and hiring decisions. Unfortunately, there is a void when management is challenged to assess the cost of lost capital because of a deferred decision or failure to act.
Rarely do we debate the estimate of lost sales that could theoretically be gained through a new marketing effort, or investment in R&D or other business-building activity. This is highly evident in the small-to-mid sized businesses as they assess their digital strategy. They often view their website and social media efforts as an expense rather than an investment in future sales. However, data is overwhelmingly convincing: Investments in improving design, functionality and popularity of your website and social media channels will generate sales.
Consumer opinions posted online are trusted 70% more than information on TV and 62% more than information printed in newspapers (Nielsen). According to a Kantar Media study in the US, 35% of social media users say Twitter has influenced their purchasing decisions. Clients who have invested in a new digital media program, including a redesign of their site, have seen an increase in website traffic of more than 100%.
If you accept that investments in a new digital media program will positively impact sales, then you must ask: What is the cost of delaying this investment? What is the value of lost opportunities, and how does this compare with the savings created by delay? Giving attention to this value is as important as the focus we give to understanding the ebbs and flows of revenues.
Spindustry Digital can provide ROI analysis, current site audits and other services to help with assessment. Contact us anytime to discuss how we can help your organization.
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