The ROI of Government Relations

You know the story. In almost every industry, clients are more empowered than they’ve ever been. With the use of digital tools, they’ve grown accustomed to getting what they want at the click of a button. Not only that, but because they have infinite choices, they’re quick to leave service providers that don’t live up to expectations.

In businesses where success is based on incremental strategy, this impatience has become a serious problem. Organizations are giving up on what should be long-term investments too soon. Public relations (PR) is a commonly-used example. Executives who don’t see the media coverage they expect for their companies right away often conclude that their PR firms aren’t providing any real value. Such overly-simplistic methods of calculating value are employed in other fields, too. Government relations is a great (if infrequently-discussed) example.

Because government relations (GR) is largely about education and building relationships – a process that takes time – clients sometimes abandon GR firms before they get the chance to see any benefits. A similar struggle exists for GR teams operating in-house. From analysts, to managers and directors, many GR professionals spend too much time convincing higher-ups of their contributions. It all comes down to the difficulty of demonstrating one concept: ROI (return on investment).

This post will explore ROI in the GR context.

 

 

 

ROI: what it is, and what it looks like

You’re likely familiar with the concept, but here’s a refresher. High ROI indicates a (relatively) low-cost investment that has paid off big time, whereas low ROI indicates the opposite.

The concept can be used in any industry. For example, studies show that, while sectors such as insurance, banking, and high tech have all invested in big data, executives have different expectations of the return they will receive on this investment from one sector to the next.

In addition to different expectations, industries tend to use different metrics to calculate ROI (at least, they should). Though, in the end, everything comes down to dollars and cents, the path to these dollars and cents isn’t always direct. Let’s briefly go back to public relations, since PR practitioners are not-uncommonly accused of providing low ROI.

Experts generally agree that using sales to measure PR effectiveness is misguided. But there’s plenty of disagreement about which metrics should be used. For example, in this Forbes article, Ilya Pozin suggests tracking everything from endorsements, to brand awareness, to valuable relationships. Unfortunately, these factors can be difficult to quantify. Consider “valuable relationships”. For most organizations, being connected to journalists, influencers, and other relevant contacts can provide a huge advantage.

Let’s say an influencer makes a positive comment about a company’s product or service, leading to an uptake in new customers. This is a concrete, monetary benefit. But tracking the process that led to it– from the PR professional and his activities on various media channels, to the positive impression on the influencer in question, to the decision on the part of the influencer to send the beneficial tweet – can be complicated. Oftentimes, executives will see such an event as a stroke of luck, or attribute it to the wrong person.

Let’s consider how similar scenarios might play out in government relations, starting with analysts. Many GR analysts aren’t directly involved in relationship-building activities. While the insights these individuals provide are often instrumental in achieving positive outcomes, these contributions aren’t always obvious after the fact.

In contrast, when a GR professional who participates in relationship-building activities plays a crucial role in achieving a legislative outcome, she can often demonstrate this fact to the organization she’s advocating for. This is because GR communications don’t take place in the same noisy, over-crowded public arena as those in PR; to the people reviewing them, things can appear more clear-cut.

Having said that, when it comes to demonstrating ROI, those who are directly involved in lobbying and advocacy face their own unique challenges. Because their target audiences are so small, the likelihood that they won’t connect with anyone who is able to help their cause is relatively high. As a general rule, it’s also fairly obvious when these practitioners fail to hit the mark (as “hitting the mark” might means successfully reaching a handful of specific individuals).

In these situations, it can be difficult for a GR professional to prove to a client – or the executives at the organization they work for – that their activities have set them up for success the next time around. Often, conveying the potential future value of a new relationship is impossible.

 

 

 

The right metric: parliamentary and legislative discussion

According to Christopher Penn of Shift Communications, there’s an easy, straightforward method of finding return on investment for PR. But are clients and company directors impressed by such demonstrations? And, more importantly (at least for our purposes), can they offer any insight into possible methods of measuring GR effectiveness?

I’m not sure about the first question, but I’m inclined to say no to the second. As this post mentioned earlier, target audiences for GR tend to be very small and highly specific. In any given scenario, the “value” of nurturing a relationship will depend on factors such as reputation, influence, positions relative to those of other key decision-makers, and so forth. Of course, this post is about demonstrating ROI, so the real question is whether a formula or audience assessment will mean anything to those looking in from the outside.

While having the right contacts (and ideas for leveraging them effectively) may be impressive to those investing in you in the beginning, the perceived value of these advantages diminish quickly if they’re not followed up by results. This is unfortunate, as clients and directors often have unrealistic ideas of how long it should take to see significant results.

Luckily, there is one potentially-impressive metric that can help GR professionals prove the value of their work, even when they don’t achieve legislative change. Tracking how frequently a client’s topics of interest are raised in parliament (or, when relevant, in legislative assemblies) can be an effective way of quantifying the benefits of your efforts.

The value of gaining the right person’s ear may, in and of itself, seem a bit hazy to people outside of the GR field. But in government proceedings, a sudden increase in discussion around a relevant issue is an unmistakable step in the right direction. This is one measure of ROI that’s hard to find fault with.

For the analyst who doesn’t do any direct relationship-building, ROI looks a bit different. In many cases, analysts are unsung hero of GR teams. Their contributions can be easily overshadowed, and they’re often blamed if important information slips through the cracks.

At Gnowit, we’ve heard this time and again – especially from members of in-house teams. If a GR manager catches a relevant piece of information an analyst has missed, it  looks bad. If the director of the organization in which the team operates catches a piece of missed information, it could make the whole team look bad.

For this reason, the ROI on the analyst’s efforts can be measured in the number of crucial government discussions, documents, and announcements he catches. The earlier useful information is caught and brought to the attention of a manager or director, the better.

 

 

 

Towards a tangible demonstration

So far, this post has suggested some metrics for ROI. But in government relations, as in public relations, determining worth is one thing – proving it is another.

Practitioners who play a direct role in lobbying and client advocacy need to find ways of demonstrating the government awareness they’ve brought to an issue. Their method of conveying this information should be straightforward, clearly illustrative, and easy for clients and executives to access.

Unfortunately, it’s not uncommon for those in GR (or any field where significant groundwork must be laid before results become apparent) to face suspicion. Offering clients the ability to track progress at any time adds to more than just credibility – it lends the practitioner in question an air of transparency.

Reports are, of course, the most common way of conveying this information. But static documents that merely communicate the facts aren’t always the best option. We now know more than ever before about how human beings like to digest information. 65% of us are visual learners, and there’s great value in experiential learning (a concept based on the idea that we learn through doing, rather than being told).

These principles can be applied whenever the goal is to help an audience absorb information in a painless (and possibly even enjoyable) way. One way for GR practitioners to employ them is to use software to create interactive reports. Those with data-visualization features are especially useful. Finding the perfect software may require some research, but it’s well worth the effort if you can provide clients and executives with reports they’ll actually want to read.

If you use any software or online tools to monitor legislative discussions, you can provide clients with direct access to results turned up through these sources. This is a more direct solution than creating reports. However, its effectiveness will depend on specific factors, such as the ability to customize what the people assessing your work will see (which will provide them with more directly-relevant and less-frustrating viewing experiences) and the ability to white label pages of results.

For GR analysts, technology may also provide a solution. If demonstrating ROI is directly related to catching crucial developments as early as possible, automation offers a clear advantage. When selecting a monitoring solution, it makes sense to look for platforms and tools with the most comprehensive scope of government sources possible. Features that will help you find and convey information quickly (such as real-time alerts) are also useful.

 

 

But wait…

We at Gnowit speak to a lot of government relations professionals. In our posts, we reflect on the problems they discuss with us. But we’re not so foolish as to think we know everything.

We’d love to write a follow-up post on this subject, surveying the methods used by GR professionals across Canada (and beyond). To do this, we need your expertise. How do you demonstrate ROI? Is there a creative method you use, or is it all about sticking to tried and true best practices? Let us know in the comments section, or drop me a line at molly@gnowit.com.

 

Feature Image: Simon Cunningham

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