A fever dream of most communicators I know is that we could quantify in monetary terms the public relations/communications value to organizations. It inspires yearning, craving, shivering, salivating and panting — at least in a few communicators I’ve known.
The marketing folks love to lord it over their PR colleagues — X impressions equals Y prospects equals Z sales. We don’t apply that formula often, and I worry that if we concentrate too much on quantifying impact on sales, we wind up reducing our role by at least half if not more. In the broadest sense, all communication functions are about impact on the business of the business, true, as we won’t sell as much with a bad reputation as we might with a good one.
The trouble is that looking for that direct formula can lead to discounting issues management, employee communications, social responsibility, community relations, and all other stuff that isn’t directly related to product/service PR. This is why I embrace the term “integrated communications,” but reject the inclusion of the word “marketing” in between the two words.
What we need is a monetary proxy for reputation, and I wonder whether “goodwill” might be a worthy solution. Goodwill is, in a merger, the difference between book value and the price paid in the acquisition. It’s the value in real terms of the brand, the reputation the acquired company brings to the table, the potential sales represented by the customer base. You might say that the intrinsic knowledge of the employees (as opposed to the explicit knowledge) has value in that construct too. Think of an industrial firm, such as Goodyear, with all the patents it owns, all the innovations it’s bringing to the table. Surely those are worth something in financial terms.
Improving reputation, even if it doesn’t draw an explicit path to revenue, should lead to an improvement in the overall value of the enterprise. The activity that brings about that improvement can be quantified in terms of impact through research, both objectively (in terms of behavioral factors such as recommendations), and subjectively (in terms of qualitative measures such as willingness to recommend.) We then could look for statistical linkages among those data.
OK, my academic friends can sharpen their red pencils, no doubt, as I’m grossly oversimplifying. But I’m fairly certain that there is something to this. What if we could document the reputational impact of influence?
Think with me…