Measuring Digital Signage ROI
Having actionable data is essential for any new technology; how you obtain that data is just as important.
Digital signage is everywhere, from retail to healthcare and almost any environment in between. Yet, there are still many reluctant adopters. Why? Because hesitant prospective clients continue to ask the same question: How will it grow my brand? They want numbers before they can consider the investment. They have a high level of doubt, despite the fact that digital signage continues to grow with the market growth estimated to hit $27.34 billion by 2022.
What they really want to know is what they can expect to get out of their investment. The good news is ROI is not as elusive as it once was; there are many ways to interpret and measure it. The literal interpretation of ROI is dollars returned versus those invested, either by actual revenue increases or by reduced costs. Other ways to quantify ROI are through brand awareness and impact on the customer experience. Sometimes, signage can actually do all of these things. Wayfinding signage in a shopping center is a good example because it can promote certain products that are on sale, increase brand awareness by integrating social media, and improve the customer experience by answering easy questions, like where to find the restroom.
Let’s look at some specific examples at each stage of the ROI process: goal setting, what to measure, how to measure it, and analysis.
Step 1: Define a Goal
It’s impossible to measure success without a goal. Start with a SMART goal:
• Specific: Real numbers.
• Measurable: Can the goal be quantified?
• Attainable: Is it realistic? Make it challenging but not impossible.
• Relevant: Does it pertain to the larger set of goals?
• Timely: Set a deadline.
Let’s look at a specific dollar-related goal that your customer might set: increase sales of item X by 20 percent in the next three months. This can be defined as SMART as long as the client has data about current and past sales figures for the item.
A branding goal could be to increase mentions of the client’s brand on Twitter by 10 percent in the next 30 days. Again, the client would need to know their current monthly mentions, or number of times other Twitter accounts tag the client’s brand in their tweets for all of their followers to see, to measure this.
An example for improving customer experience might be to reduce average wait time by 60 seconds during lunch in the next 14 days. The client would need to know current wait time to initiate this goal.
Step 2: What and How to Measure
Now that the goals are set, what will be measured and how will you do it?
• Example 1: Revenue Increase
It’s fairly simple to determine if sales increased on a particular item within a timeframe. But what’s important is that no additional factors contribute to the change in revenue. It may be a challenge to determine whether digital signage contributed to a sales jump if your client also changes their TV advertising budget or activity on social media. For the period of time that is being measured, recommend that your client not alter their other marketing practices in any other way. This may seem extreme, but it’s the only way to ensure accuracy. This way, the measurement is simple: Did sales for product X increase from the previous month, before the digital signage promotion? It would also be prudent to compare it to sales from that month from the previous year.
• Example 2: Brand Awareness Increase
To measure an increase in Twitter mentions as a result of digital signage may seem impossible. But a good way to relate mentions back to the digital display is to use specific hashtags that are only promoted on the digital signage. Then, you can specifically measure the number of times that hashtag is used.
• Example 3: Customer Experience
This goal is very specific in that it defines an exact time period. You may be wondering if a reduction in wait time actually improves the customer experience. Less time in line usually makes customers happy, but this is an assumption. It’s also important to note that digital signage is a proven technique to decrease wait time. It does this by preparing those in line to order faster because the information is clearer and drives consumers to action.
To measure if wait time decreased, one option is to measure total wait time from entrance to checkout, but that may be prohibitive because there would need to be some kind of sensor at the door. Another, easier span of time to measure is from order time to actual receipt of food, which is usually tracked in quick-serve or fast casual restaurants. You would want to calculate the average wait time during lunch (11 a.m. to 2 p.m.) and determine if that decreased. But watch out for outside factors, like new staff who might not be as quick as more seasoned staff, or a new menu item that takes longer to prepare. Again, it’s critical to isolate the experiment so that digital signage is the only new factor.
Step 3: What Does the Data Mean?
The next step is to analyze the data and determine what worked and what should be tweaked. If sales increased on the promoted product, but not to the percent expected, then maybe work on the content. Ask questions about how it was presented and how long it was on the screen. Maybe change the imagery or animation. But remember, if you are going to change something and then re-measure, pick only one thing to change. You can also look for data trends. For example, did sales spike at specific times? If so, leverage this.
Looking at brand awareness on social media, you should be able to isolate mentions and engagements specific to the hashtag you chose. If there’s no significant change, then maybe it wasn’t a relevant hashtag, or maybe Twitter isn’t the end users’ social platform of choice. If there was an increase, map those engagements to better understand if they led to new followers or website clicks. To put it all in context, you should look at overall engagement stats for Twitter, and determine the percentage driven by this hashtag. For example, if you had a total of 300 new followers for the time period but could only link 120 to the hashtag experiment, then the total of new followers is 40 percent.
For customer experience, create a graph of wait times by time of day, then compare to the data collected before digital signage. If there wasn’t a decrease, then the main culprit is probably content. Can the fifth or sixth person in line see the signs clearly? Is important information not being shown long enough? If wait times did decrease, spot the trends. If wait time decreased by 20 seconds consistently from 11:30 a.m. to noon, what does this mean compared to other times that performed better or worse? Add another line to the graph that includes volume so the data has context. If there is high volume and you’re still seeing decreases in wait time, then something is clearly working well.
ROI doesn’t need to be mysterious. It’s important to understand what a client’s goals are: revenue increases, brand awareness, or customer experience. Once the goal is determined, it’s essential to make it a SMART goal, understand how and what to measure, and analyze the data. Then you can take action.
Consistently setting up ROI experiments in cooperation with your clients not only helps them understand the value, but also provides you with the opportunity to author case studies, which any prospective client is sure to love.
Find Beth Osborne on Twitter at @bethfosborne and follow Big Picture at @BigPictureMag.