Real Estate ROI Calculations

I am so sick of the term ROI, particularly when it comes to CX. It's limiting and so short-term. Let's talk about how CX can deliver business value instead (revenue, efficiency, culture). Here’s where/why ROI might not always be the best fit: 1. Long-Term Investments Some investments are just strategic and require a long-term perspective to realize their full benefit. For example, transforming organizational culture might involve upfront costs that don't yield immediate financial returns. Focusing solely on ROI could discourage investment in initiatives that are crucial for long-term sustainability and competitive advantage. 2. Innovation and Experimentation Innovation often requires experimenting with new ideas, technologies, or business models, where the outcomes are uncertain. A strict adherence to ROI can stifle innovation because it tends to favor investments with clear, predictable returns. By focusing only on ROI, companies may miss out on opportunities to innovate and adapt to changing market conditions. 3. Holistic Value Creation Sometimes, the true value of an investment isn't captured by measuring direct returns but by its overall contribution to the company's objectives. This might include achieving regulatory compliance. The benefits are crucial for the business but may not be directly reflected in ROI calculations. 4. Cost of Opportunity Don't overlook the opportunity costs of not pursuing certain initiatives. Investments that offer adaptability in rapidly changing industries might have a lower immediate ROI but can provide significant value in terms of strategic positioning. I see this a ton in companies evaluating CX initiatives. What's the alternative? I think it's focusing on Business Value. What does this involve? Value Realization Frameworks: Implementing frameworks that assess the total impact of an investment, including financial, customer, employee, and operational impacts. Balanced Scorecard: Using tools like the Balanced Scorecard to evaluate performance across multiple dimensions, not just financial outcomes. Value Dashboards: Creating dashboards that track a variety of key performance indicators (KPIs) or Objectives & Key Results (OKRs) that reflect both short-term and long-term value creation. Shifting the focus from ROI to broader business value allows companies to align their investments more closely with strategic objectives and sustain competitive advantage in the long term. This approach also supports a more comprehensive evaluation of how initiatives contribute to the overarching goals of the organization vs. the short-term mentality that ROI can sometimes enable. How are you measuring value at your company? Or are you still stuck on ROI? #customerexperience #roi #returnoninvestment #ceo #cfo

In the race for marketing ROI, everyone wants the shortcut. But what if the fastest path to sustainable growth isn't a sprint, but a marathon? A tale of two marketers in the recruitment space reveals the hidden cost of impatience - and the exponential rewards of investing in a demand gen, brand-led approach. Marketer A focuses exclusively on lead generation. Marketer B invests in creating and capturing demand. After 6 months: Both have similar pipeline numbers Both have hit their MQL targets After 12 months: Marketer A's cost-per-lead is rising Marketer B's is falling After 24 months: Marketer A is struggling to maintain velocity Marketer B has created a self-reinforcing ecosystem where: - Candidates recognise and trust the brand - Clients include them in opportunities without formal RFPs - Content gets shared without paid promotion - Sales cycles shorten by 22% This isn't hypothetical - we used to be marketer A. We are now following the playbook of marketer B. Short-term tactics create short-term results. Brand investment compounds over time.

One of the most misunderstood ideas in marketing today is ROI. Marketers are often asked to justify their work through immediate returns. The problem isn’t accountability — it’s time horizon. There’s a well-known principle in economics and systems thinking called Goodhart’s Law: When a measure becomes a target, it ceases to be a good measure. When marketing decisions are optimized exclusively for short-term ROI: • Metrics get gamed rather than understood • The customer journey is reduced to a transaction • Long-term brand equity quietly deteriorates In practice, many organizations over-invest in acquisition, while under-investing in retention and experience — despite the data being clear: A 5% increase in customer retention can drive 25–95% profit growth. Retention: → Compounds revenue over time → Lowers acquisition dependency → Builds trust, preference, and pricing power “We acquired X new customers” is a short-term achievement. “We retained customers for 10 years” is a durable competitive advantage. Consider your own behavior as a buyer. Do you stay loyal to brands that consistently deliver value and relevance — or to those that rely on short-lived discounts? Exactly. Sustainable growth comes from long-term brand trust, not perpetual short-term optimization. Key takeaways: • Measure what compounds (LTV, churn, retention), not just what converts • Combine quantitative metrics with qualitative signals (brand preference, advocacy, sentiment) • Treat brand investment as a strategic asset — not an expense to be justified quarterly The most valuable ROI in marketing is the one that compounds 💡

Long-term marketing measured with short-term metrics and KPIs becomes incredibly hard to defend and continue. There are a number of ways that brand efforts don’t fit the SaaS demand gen model and, without a long-term mindset about brand and an understanding of how brand effects show up, success is unfortunately very hard. This is exactly why mindset is the primary initial focus at Storybook. For example - ROI measurement. Brand effects take time to show up, and they don’t decay quickly like performance marketing efforts. A lead gen campaign running for 6 weeks will generate almost all of its leading metric impact within those weeks and quickly return to zero. But, if a brand campaign creates meaningful awareness and recall with 1,000 relevant people in those same 6 weeks, that value won’t materialize inside of a set time widow. Judging it by an ROI metric becomes an arbitrary exercise. When do you determine the time window during which return must be realized? Do you keep adjusting the ROI number monthly until it shows no more change? And how do you then treat brand marketing campaigns that doesn’t technically end? Say you sponsor an event every year, or host a summit, how much value carries over from the equity of previous years? How much return is compounded across each event versus determined independently? Brand through short term metrics is a moving target. Of course, this doesn’t mean you don’t measure or track impact. Rather it requires rethinking where it shows up. Brand effects compound in the form of more and better sales outcomes, and those effects even become things to maintain. In a simple analogy, it’s like investing in your overall health to be better at running races. You could simply do high intensity workouts every day, but the plateau comes quickly if your underlying health isn’t strong. Those health effects take more time to develop but are also more enduring, and make the high intensity efforts more effective. Brand is no different. And, just like fitness, it requires the realization that underlying health impacts across short-term activities. That’s a macro and long-term mindset, and requires different measurement thinking.

I once watched a grid modernization proposal get shelved because the ROI “took too long.” On paper, the payback stretched decades. But five years later, one storm knocked out the region’s power, and the emergency costs alone dwarfed the original price tag. That’s the problem with how we often judge infrastructure: 𝘁𝗵𝗲 𝘀𝗵𝗼𝗿𝘁-𝘁𝗲𝗿𝗺 𝗹𝗲𝗱𝗴𝗲𝗿 𝗯𝗹𝗶𝗻𝗱𝘀 𝘂𝘀 𝘁𝗼 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝗥𝗢𝗜. The Texas freeze in 2021 was a $130B reminder of what happens when resilience is undervalued. These aren’t natural accidents but the outcomes of decisions made in boardrooms where only year-one numbers counted. Here’s the paradox: the best infrastructure is invisible when it works. The grid that doesn’t fail. The bridge that doesn’t collapse. The water system that doesn’t poison. That’s why leaders need a new lens: 𝗥𝗲𝘁𝘂𝗿𝗻 𝗼𝗻 𝗜𝗺𝗽𝗮𝗰𝘁. The OECD estimates every $1 invested in resilient infrastructure prevents $4 in future costs. But the real issue is accountability. Communities don’t see the ROI models, rather, they live with the outcomes. 𝗪𝗵𝗲𝗻 𝘆𝗼𝘂 𝗴𝗿𝗲𝗲𝗻𝗹𝗶𝗴𝗵𝘁 𝗮 𝗽𝗿𝗼𝗷𝗲𝗰𝘁, 𝗱𝗼 𝘆𝗼𝘂 𝗮𝗰𝗰𝗼𝘂𝗻𝘁 𝗳𝗼𝗿 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝗥𝗢𝗜 𝗼𝗿 𝗱𝗼𝗲𝘀 𝘀𝗵𝗼𝗿𝘁-𝘁𝗲𝗿𝗺 𝗺𝗮𝘁𝗵 𝘀𝘁𝗶𝗹𝗹 𝗱𝗿𝗶𝘃𝗲 𝘁𝗵𝗲 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻? #ReturnOnImpact #Leadership #ResilientInfrastructure

I heard a comment yesterday: use GA ROAS for "short term" optimizations, and use incremental ROAS for "long term" optimizations. This is wrong. I get where they're coming from, and I appreciate that they're trying to incorporate incrementality at all. But this is confusing causality with latency. • Causality: something that CAUSED something else • Latency: the delay between the cause and effect People will say some sequence of logical statements like: "GA4 only favors the bottom of the funnel." "iROAS takes a long time to calculate." "TOF channels have higher iROAS than BOF." And then they somehow, in their mind, combine these different ideas into thinking that "GA4 = short term" and "incrementality = long term." The reality is that using any kind of traffic or click based attribution is just capturing the very last step in the long mental journey the consumer had to make before they purchased. If you dump a bunch of emails and then see a spike in GA4 attributed email revenue, that isn't because you "made more short term revenue." What's actually happening is that a bunch of people who were likely going to buy anyway happened to click on your email link because there was a coupon in there. Let's use the car dealership example again: • GA4 attribution: the car lot itself (your website) • Incrementality: the TV ads that made people want a car Yes, you need to have a car lot, and you arguably need salespeople to convince the user to buy. But it's foolish to give 100% of the credit to the car sale to the person who "convinced" the customer to buy THAT particular car. When in reality: • The customer NEEDED a new car • The customer was AWARE of a few brands • The customer had AFFINITY toward one brand • The customer lived LOCALLY to your car lot • The customer saw your lot's ADS on TV • The customer read good REVIEWS • The customer did RESEARCH All before they ever showed up to the lot. They came there and they had in mind "We're trying to buy a Doyoford Land Shark for our family of 4. I can't spend more than $50k. I heard that Ben's Car Lot is really good, and they're only 10 mins away." And when they got to Ben's Car Lot, Ben was there and did a good job of "selling" them the Doyoford Land Shark (which they had already selected). Incrementality measurement is attempting to understand the true contribution of all of those steps, or at least the ads on TV for the car lot, prior to the customer ever stepping foot locally. Attribution is just giving all the credit to the sales guy. So if you want to "juice" more short term revenue, you don't just "push more budget" toward the channels that have better GA4 ROAS. That's like just hiring more car salespeople on the lot without running ads to get people there. #incrementality #attribution

Most companies track KPIs that help them hit a short plan. Very few track KPIs that help them build a long-term strategy. There’s a difference. Planning KPIs measure how well you predicted the year. Strategy KPIs measure how well you compound value over a decade. If your dashboard is dominated by short-term variance analysis, you’re managing performance, not strategy. Here’s what true financial strategy KPIs look like: They link capital, risk, and growth choices to value creation over time: • ROIC vs WACC — not just the spread, but its trend • Economic Profit / EVA — NOPAT minus the charge for capital • 5–10 year TSR, not 1–3 year optics • Revenue + NOPAT growth vs peers, not in isolation • Capital allocation mix over time (how much cash goes to growth capex, M&A, R&D, buybacks, dividends) • Cash conversion across the cycle (OCF vs EBITDA vs Net Income — not just in a good year) • Risk tied to strategy (earnings volatility, leverage, coverage, liquidity headroom vs target) These don’t tell you whether finance did its job. They tell you whether your capital and risk choices are compounding in the direction your strategy promises. But strategy dies when it never connects to execution. Which is why the second set of KPIs is just as critical, and often missing. Strategy execution & alignment KPIs These connect the P&L and balance sheet to customers, operations, and learning: • Balanced Scorecard across: Financial, Customer, Internal Process, Learning & Growth • Customer economics: NPS, retention, net revenue retention, CAC payback, LTV • Strategic initiative delivery: % delivered on time/on budget with real impact (margin uplift, churn reduction, cycle time, etc.) • Talent health in strategic roles: Regretted turnover, engagement in critical teams • Innovation pipeline: % of revenue from products/services launched in the last 3–5 years If your KPIs can’t answer: - Are we allocating capital in a way that compounds value? - Is the organization aligned to deliver on that promise? Then you’re tracking activity, not strategy. Finance’s job isn’t to explain last month. t’s to architect how value gets built over the next decade. That requires a very different scoreboard. I have a few spots open for my Executive Alignment Sprint.  Align growth, finance, and operations. https://shorturl.at/6cMF2 A few other helpful tools 👉 Variance Toolkit https://shorturl.at/IdCa6 👉 Budget to Performance Framework  https://shorturl.at/KJnku Please share you thoughts in the comments. ♻️If this is helpful, Like and Repost to help others Follow Beverly Davis for strategic finance insights.

Risk and time are two big factors in evaluating retail media spend. Retail media strategies can vary drastically based on the company’s risk tolerance and how long they’re willing to wait for returns. Low Risk, Short Time Horizon: Due to cash position or strategic reasons, some companies have a short time horizon to get ROI and/or a low risk tolerance so they typically focus on lower-funnel tactics. They want to see immediate conversions and short-term sales impact. Every dollar spent must drive immediate results. High Risk, Long Time Horizon: For others, it's about playing the long game. They are willing to invest more in top-of-funnel strategies that drive new-to-brand customers, and focus on lifetime value, even if it means a lower ROAS or higher TACoS in the short term. Many companies make the mistake of not aligning on these two crucial factors upfront. They don't run campaigns across the full funnel to get data that informs their strategy against risk and timeline. We look at a lot of businesses where an agency has the business on autopilot generating artificially high metrics (ROAS) by spending a disproportionate amount of the budget on branded search terms and onsite. We also take on businesses where the previous agency didn't advocate loudly enough for more budget to fund high return opportunities (typically longer time horizon, new to brand, LTV). No one did the hard work of educating, testing, and aligning the management team on a full funnel strategy that was informed by alignment to risk and time. The aspiration should be that your agency is helping lead a general management level discussion with your cross functional management team about risk and time to inform your retail media budget & strategy.

Fiber vs. Satellite: The Real 20-Year Cost Story I was recently asked this question. "Why deploy fiber in rural areas as it’s so expensive when deploying an aerial solution; isn’t a satellite solution better?" So here is my takeaway - when communities look at rural broadband options, the conversation often stops at the initial cost. Fiber looks expensive up front, and satellite looks “cheap and fast.” But let’s look at the real picture becomes clear when you compare CapEx vs. 20-year OpEx: Aerial Fiber ·        Higher upfront construction cost ·        Very low ongoing operating cost ·        Over 20 years, fiber typically lands in the $7M–$12M total cost range for a 100-mile rural build ·        It becomes a long-term asset with predictable costs and the best performance LEO (Low Earth Orbit) Satellite (e.g., Starlink/“Skynet”) ·        Very low upfront cost ·        High monthly service fees ·        Over 20 years, satellite often reaches $22M–$31M in total cost for the same customer base ·        Great for quick deployment, but the ongoing fees add up—fast   Conclusion: Fiber costs more on day one, but satellite costs far more over the long haul. Communities and operators that only look at CapEx miss the bigger financial picture. A 20-year view tells a very different story. If you’re weighing long-term broadband strategy—or considering a hybrid fiber + satellite approach—happy to compare models and discuss what brings the strongest ROI. Before everyone shouts – what about Fixed Wireless for the last mile…..I’ll talk about that another time 😊 #Broadband #Fiber #RuralBroadband #Telecom #Infrastructure #Connectivity #Engineering #KMBDesignGroup

If you’re still making marketing decisions based on #ROAS or #iROAS alone, you’re playing checkers while the competition is playing chess. Efficiency is great, but growth is better. It’s time to ditch the obsession with short-term metrics and start thinking like a CFO. For an industry that prides itself on data-driven decision-making, marketing sure has a problem with using the wrong metrics. Take ROAS (Return on Ad Spend) and its younger sibling, iROAS (Incremental ROAS). These have become the be-all and end-all for marketers looking to justify their ad dollars. But here’s the real question: why are we so obsessed with them? And more importantly—should we be? ROAS vs. iROAS: What’s the Difference? ROAS measures total attributed revenue divided by total ad spend. iROAS filters out organic sales and focuses only on revenue directly caused by advertising. The result? A cleaner view of marketing efficiency, but still not the full picture. A high iROAS could mean you’re under-investing in a channel, limiting its potential scale. Marketers love efficiency, but what about profitability? What about long-term brand health? iROAS doesn’t tell you that. The Real Question You Should Be Asking When you ask for iROAS, you’re essentially saying, “How much more revenue am I getting for every extra dollar I spend?” But that’s a short-term view. The better question is: “How does this investment drive long-term business growth?” iROAS doesn’t answer that. Net Present Value (NPV) does. Why is the Marketing Industry Stuck on ROAS-Based Metrics? Because they’re easy. ROAS and iROAS are quick, tangible, and platform-friendly. CFOs love them. But easy doesn’t mean right. We need to challenge this outdated obsession. Marketing isn’t an expense—it’s an investment. And investments should be judged by their ability to drive long-term profitability, not just short-term efficiency. What Should Marketers Use Instead? If you really want to measure marketing’s impact, you need a metric that accounts for revenue, costs, and time—something that reflects how marketing contributes to business growth over the long haul. That metric is Net Present Value (NPV). NPV factors in future cash flows, the cost of capital, and the decay of marketing impact over time. Unlike iROAS, it doesn’t just tell you whether a campaign is efficient—it tells you whether it’s truly profitable in the long run. #Marketing #eTAIL #P2PI #Attribution #Incrementality