One of the more favorite abbreviations in the modern business world is ROI, a concept which Krishen Iyer, CEO of MAIS Consulting, and other entrepreneurs take seriously for themselves and for their clients.
If you’re not familiar with the term ROI, it stands for Return on Investment. In a business setting, ROI is a metric that tells how much effort has been put into a particular project and how much came out of it.
It can be used in a purely financial sense, perhaps showing how much profit could be seen based on how much is spent to make it happen.
A simple example of ROI is someone buying a run-down house for cheap then spending a certain amount of time and money to improve it. Then, they can sell a nice-looking house for a significant profit. So, the ROI in a case can include all the costs, from the initial sale to construction supplies. The time spent for labor, whether or not it was paid or voluntary, should be part of the equation as well. They can pat themselves on the back if they have low effort and high profits.
The “numbers get bigger” when you’re talking about larger projects, such as a department initiative that includes multiple projects to create and market something, from social media to survey groups to payroll to any legal matters. Executives may not want to know all the details of a project but they are often interested in seeing the ROI, which can be a useful summary or basic bottom line.
For Krishen Iyer, the ROI he typically works with is much larger and more complex.
His company MAIS Consulting specializes in helping the insurance industry with areas such as marketing, contracting, strategic growth, and general policies.
Krishen Iyer has been part of this industry in different roles for more than 20 years. With MAIS Consulting, he looks for opportunities to form partnerships and encourages his clients to the network.
He provides personalized service to empower clients to do business better, which includes bringing in new customers and making sure existing clients see opportunities to stick around. He also tries to connect those who have in the business with newcomers so everyone benefits.
And yes, like many business owners, he’s interested in ROI and encourages his clients to try to calculate this regularly.
Figuring out the ROI also can be a way to identify problems and inefficiencies. If a company is paying a sizeable amount in employee overtime on a regular basis, it could indicate that workloads are too high or that the cost of hiring an extra person may be able to cut down on the other employees working extra hard and the company paying extra for overtime.
Or, from a marketing perspective, an ad campaign can be abandoned or modified if it’s not getting the results compared to other campaigns that have been getting more attention. How this is determined is up to the company: attention, contacts, or actual sales? It can feel painful at first to decide to scrap or change something that took a lot of work to put together, but the ROI could be fairly easy to calculate as well as to justify taking action.
A better choice?
While ROI can be considered an objective measurement, it doesn’t necessarily measure everything. There are some values that go beyond “how much did it cost and what was their gain/loss?” There are also situations where ROI isn’t necessarily uniform or relative.
While figuring out ROI can be a good strategy at the end of a campaign, trying to estimate it during the middle of a campaign may give skewed or incomplete info.
Or, assessing overall ROI may not necessarily be the best way to see the success or challenges of all the components that make up a project. For instance, one element, such as social media, may have done well to meet whatever goal was set, but another element, such as email newsletters, wasn’t as well-received.
That’s why some marketers, including Krishen Iyer, are looking for a better metric beyond ROI. One solution that some marketers are trying is “ROE” or Return on Effort. This is more of a holistic figure that splits up different efforts in a campaign to see what kind of results are being achieved individually and on behalf of the whole group.
For instance, ROE can look at the response of different channels and different markets and different media. It can be enough to provide a general snapshot of the current performance. It also can include content that can lead to a certain outcome, rather than neutral summaries.
Regular ROE measurements, perhaps those conducted on a daily basis, can even be used in the generation of the occasional ROI.
About Krishen Iyer
Krishen Iyer sees both ROI and ROE as useful tools. He said ROE should be thought of as more of a tactical tool that can focus on when and how content is created and deployed, while ROI is more of an operational tool.
He’s eager to share this new concept with his clients to see if they can benefit from it in their efforts.
Krishen Iyer grew in the Fresno area of California. He earned a degree in public administration and urban development and moved into the insurance business.
Within the industry, he’s had a variety of roles, including working at an agency, managing a variety of companies, and promoting affiliate distribution centers that could offer various products and services.
He then owned a variety of companies within the industry including NMP Insurance, which also went by the name Name My Premium.
Next, Krishen created Managed Benefit Services, which generated leads for the industry by providing analytical data to clients which identify potential customers based on demographic information and past insurance needs. MBS also provided marketing services for insurance companies, with the thinking that if the client does well, everyone benefits.
Finally, he created MAIS Consulting that focuses on creating partnerships along with giving clients smart strategies for getting the word out.