Measuring the ROI of Digital Signage
If you’ve spent any amount of time as a business owner, you’ve most likely heard about the concept of return on investment, or ROI. ROI is a figure used to express how much money you’ve made relative to how much you’ve spent, and is a popular way to track whether or not major financial expenditures are worthwhile. As one such expenditure, we strongly recommend tracking your ROI when you invest in digital signage. Here’s why.
Introduction to ROI in Digital Signage
ROI is an important element of any major business investment, and digital signage is no different. What sets digital signage apart, though?
Why Measure ROI for Digital Signage?
Though we believe that it’s worth every penny, there’s no denying that digital signage is a big monetary investment, especially for smaller, up-and-coming businesses. If you’re planning to invest heavily in a business venture, you need to be sure that your spending pays off in the end. While you can intuitively determine your success to a degree, it’s also important that your intuition matches up with the facts. Measuring ROI is the most direct way to do this. It’s a very straightforward measure of how much money you’re getting back relative to the amount of money you originally spent. This value can help shape your current and future strategies, and allows you to optimize your spending.
Key Components of Digital Signage ROI
Now that you know the importance of tracking ROI on your digital displays, you’re probably already thinking about ways to do so. Before that, though, it’s important to know what exactly affects the ROI of your digital signage.
Initial Investment Costs
By far the biggest investment for digital displays is the upfront expense. Quality doesn’t come cheap when it comes to digital signage, so you’ll have to be willing to play the long game when making back your profits. When making that investment, be sure to do a bit of number-crunching ahead of time to figure out what you can reasonably afford. Though the increase in profits will eventually outweigh the initial cost, your business will have to be able to survive that financial hit at first, so be sure you’ve got savings to spare before making any purchases.
Ongoing Operational Costs
Though not quite as steep as the purchase itself, you’ll have to pay continuous operational costs to keep your commercial audiovisual displays up and running. These operational costs typically cover a few things: the electricity to power the displays, maintenance expenses to ensure no sudden malfunctions happen, and repair costs in the event that a display is somehow damaged. In addition to being able to afford the initial expense, you also need to ensure you can afford to keep your digital signage in working order. As long as you’re willing to spend a lot in the short term, though, you’ll notice a huge revenue spike in the long term, so keep at it and it’ll all pay off!
Quantifying the Benefits of Digital Signage
Having figured out the “investment” aspect of ROI, let’s pivot to the “return.” The benefits of digital signage cover an extremely wide range of things, so we find that it’s best to separate them into two categories: direct and indirect.
Direct Financial Gains
The most noticeable financial benefits of using digital signage solutions are an increase in your customer base and the resulting increase in revenue. When used properly, digital signage is capable of drawing large crowds to your storefront. Of course, the more customers you have in your store, the more people you have making purchases. As a result, the digital signage’s ROI goes up significantly.
Indirect Benefits
Not all of the benefits are as direct, though, and may impact areas other than ROI. As mentioned earlier, digital signage brings more people to your storefront, but what about the people who leave without buying anything? Those people may not increase your ROI directly, but they’re a huge help overall. Rather than bring in direct revenue, they help create brand awareness by spreading the word, and may even stop by to purchase something later on. Simply put, digital signage impacts much more than just sales figures, and it’s worth noting these other contributions as well.
Methods to Measure Digital Signage ROI
Of course, if you’re going to measure your ROI, you need a well-defined, standardized method for doing so. Effective methods almost always combine the right tools with the right techniques, so it’s important to be well-versed in both.
Data Collection Tools
Fortunately, the need for data collection tools is near-constant in any industry, so there is a wealth of apps at your disposal. Be sure to check out several options before deciding which app to use. Compare the different features each one offers, decide on what you’re willing to pay for a data collection tool, and read up on product reviews. Once you’ve done your research, you’ll be able to pick out a tool that does everything you need it to do.
ROI Calculation Techniques
Once you’ve found a tool that amasses all your data, you’ll need to figure out how to transform that raw data into a reliable ROI calculation formula. Though there are several different formulas floating around, the tried and true method is to divide the profit earned on an investment by its initial cost, expressed as a percentage. This gives you a better idea of how effective your digital signage is, and can be used to inform your future marketing decisions.
Challenges in Measuring ROI for Digital Signage
Measuring your digital signage ROI isn’t without its challenges, though. There are a few unique factors to keep in mind when measuring your ROI, but as long as you account for them, you shouldn’t have too much trouble.
Intangible Benefits
The main benefits of digital signage are a greater sense of brand awareness and more efficient internal communication. While you can notice both of these things intuitively, they’re hard to assign a numerical value to, which makes calculating the ROI a bit more challenging. Rather than measure these metrics directly, we recommend tracking other, more quantifiable factors like sales numbers. Though not a direct measurement of your ROI, they do at least correlate, making it a bit easier to keep track.
Evolving Technology and Market Conditions
When it comes to technology and the needs and wants of your target audience, the only constant is that there are no constants. Whether it’s a revolutionary new piece of technology that has just been released or a hot new market trend, there’s always something new to consider as a business owner. While you don’t necessarily have to go along with everything new that crops up, it’s important to keep your brand and marketing materials current. Be sure to keep in touch with the latest industry news, and keep track of how the latest trends could potentially affect your ROI.
The True Value of Digital Signage From Teksetra
In short, digital signage is an invaluable tool that’s sure to help your company, and tracking your ROI can help you get the most bang for your buck. Whether a direct increase in sales or an overall heightened sense of awareness, digital signage brings countless benefits to your business, ultimately paying for itself tenfold if given the right set of circumstances. Of course, to get the best results, you need to buy the best products, and that’s where we come in. At Teksetra, we pride ourselves on our commitment to quality, reasonable prices, and helpful blogs like this one to ensure your digital signage experience is a great one. If you’d like to get started with us, feel free to visit our website today!
