content & cash: the value of content (cape town edition)
DESCRIPTION
In this session, we discuss the complicated relationship between content and cash-- focusing specifically on the conversations you need to have to scope, price, and prove the value of content work.TRANSCRIPT
CASH Content
Photo: © 1984 Betty Weinaug
I am two people.
Johnny is the nice one.
Cash causes all the trouble.
—Johnny Cash
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Business expectations
To make an investment, organizations expect:
• To know exactly what our product is
• Proof of competency/quality
• Exactly how much it will cost
• Provable value and ROI
Hard numbers. Right now.
3
yikes.
We can do it
• We know content work is valuable
• We know content is a benefit, nay necessity, for businesses
• And the business world is catching on, too
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Today
• Selling and scoping
• Estimating value/ROI
• Pricing
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But first… some anger management
1.It’s not (always) about disrespect or even money.
Photo: ©2012 John Alderman
Economics is making the
most out of life. —Gary Becker
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Decision making is scary
Investing in content:
• Means NOT investing in other things
• Might result in loss of:
• Money
• Time
• Other opportunities
• Professional reputation
• Emotional anguish
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And hard…
People:
• Are limited by what they know
• Latch on to things that are familiar
• Take their best guess
• Often play it safe
• And then immediately start worrying that they’ve made the wrong decision
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2. Content is a harder decision than most
Photo: ©1980 Betty Weinaug
Content breaks all the economic rules
• Things of value are usually
• Exclusive
• Transparent
• Hard to replicate
• Endless supply AND endless demand
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“Content strategy” is a service
• “New” industry
• Very diverse
• No obvious accreditation
• Doesn’t fit nicely into a traditional business
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3.Numbers don’t need to be exact.
Photo: ©1980 Betty Weinaug
As far as the laws of
mathematics refer to reality,
they are not certain; and as
far as they are certain, they
do not refer to reality.
—Albert Einstein
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Measurement is…
A set of observations that reduce uncertainty where the results are expressed as a quantity.
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Exacts are impossible
Numbers reduce uncertainty:
• Approximate values
• Shortcuts for the brain
• Common vocabulary
Think about numbers as a communication tool.
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Selling and scoping (building a relationship)
Photo: © 1978 Betty Weinaug
1. Do your homework
Get all the information you can, find out:
• What is the decision?
• What impacts that decision?
• What else do you need to know?
• What experience do stakeholders have with content?
• Is there a budget?
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The goal:
Make a confident decision that’s beneficial to everyone.
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2. Narrow down the need
What’s the buyer buying?
• Good or service
• Service
• Strategy
• Planning
• Designing products or processes
• Implementation
• Creation
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3. Make connections
23 Photo: © 1980 Betty Weinaug
4. Understand all benefits and costs
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Type Benefits Costs
Monetary Profit or savings Cost of creation
Sensory Get satisfaction/
alleviate pain
Endure extra pain or
reduce satisfaction
Temporal Save time Lose time
Opportunity-based Gain advantages Eliminate possibilities
Psychological Reduce anxiety Add anxiety
Social Increase stature Blamed for problems
Convenience-based Makes things easier Makes things more
difficult
5. Tell a hopeful story
Create a story that highlights key benefits, such as:
• We can serve users better
• We can be more efficient
• We can beat the competitors
• We can be more accurate
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Brand it, test it, believe it
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The Content Efficiency Initiative Better for the front line
and the bottom line
Buy making our intranet content more
accessible, we’ll save hundreds of
headaches and hundreds of
thousands of dollars….
6. Eliminate fear
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• Discuss the details
• Plug information gaps
• Address concerns
• Start small or do some proof of concept work
• Provide references (services) or samples (goods)
• Be patient
Estimating value and ROI (the magic formula)
Photo: © 1980 Betty Weinaug
Value = Benefits-Costs
Value of what?
Strategy or Service
Content as product
Content as influence
Efficiency tool
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Strategy or Service
Content as product
Content as influence
Efficiency tool
Value of what?
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Content as product
What is the content product worth?
• Benefit: Profit from the sale of the product
• Cost: Cost to create the product
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Photo: © 1980 Betty Weinaug
Strategy or Service
Content as product
Content as influence
Efficiency tool
Value of what?
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Content as influence
What is the piece of content worth?
• Benefit: Increased profit as the result of an end-user behavior change
• Cost: Cost to create the content
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Estimates, not exacts Figure out what you know; fill in the blanks with assumptions • The average Johnny Cash t-shirt costs $20
• Analytics show that 50 people start the process of purchasing a t-shirt online every day, but only 10 finish the process
• User research shows that the instructions on the purchase pages are very confusing
• We assume 5-10 people leave the purchasing process because of something unrelated to the site, and 5-10 leave the process when they see the shipping costs
• We assume the remaining 20-30 people would complete the purchasing process if the instructions were more helpful
• Therefore, the value of the instructional content is likely around $144,000-216,000 per year ($20 x 20-30 people x 30 days X12)
• The cost of fixing the content is approximately $5,000
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Strategy or Service
Content as product
Content as influence
Efficiency tool
Value of what?
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Efficiency tool
What is the tool worth?
• Benefit: Cost savings as the result of employee behavior change (or happiness)
• Cost: Cost to create/maintain the tool and train people to use it
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Intermission
Photo: © 1982 Betty Weinaug
Strategy or Service
Content as product
Content as influence
Efficiency tool
Value of what?
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Strategy (or service)
What is the strategy worth?
• Benefit: Combination of:
• Savings/profit from: • Content as product • Content as influence • Tools • Sub-services
• Value of non-monetary benefits • Cost: Cost to create/implement the strategy
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Pricing (you’re worth it)
Photo: © 1977 Betty Weinaug
Everything is worth what the
purchaser will pay for it. —Publilius Syrus
(1st century BCE)
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Ways to price
You can base price on:
• Cost
• Competition
• Demand/value
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There are a lot of good
economists, but there is only
one Roger Clemens. —Robert Solow
(1987 Nobel laureate)
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Estimating probable results
Basic project information:
• Maximum gain: $216,000
• Maximum loss: $5,000
• Chance for success: 70%
Expected opportunity loss:
• Risk of approved: $5,000 X 30% = $1,500
• Risk if rejected: $216,000 X 70% = $151,200
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Pricing basics
• Give ballpark estimates early
• Estimate on time, price on value
• Aim for a consumer surplus
• Always provide numbers in person
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Price is like setting a screw. A
little resistance is a good sign. —Harry Beckwith
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Photo: © 1977 Betty Weinaug
Our friend, Johnny…
Stats
50+ million albums sold Created: 96 studio albums 63 compilation albums 153 singles
Honors
17 Grammy Awards 9 CMA Awards Rock and Roll Hall of Fame Rockabilly Hall of Fame Songwriters Hall of Fame Gospel Music Hall of Fame Country Music Hall of Fame Nashville Songwriters Hall of Fame Kennedy Center Honors National Medal of Arts Hollywood Walk of Fame
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Photo: ©2012 John Alderman
It’s about
decisions not
disrespect
It’s NOT
us-against-them it’s about
building relationships
It’s about
reaching understanding and
reducing uncertainty
It’s about
estimates not
exacts
It’s not
traditional but it’s
achievable
Go prove it.
Your work is valuable.
Thanks! @melissarach
www.contentstrategy.com
www.dialogstudios.com
58 Photo: © 1981 Betty Weinaug
Want to know more?
Content Strategy for the Web (second edition)
Check out chapter 10
By Kristina Halvorson and Melissa Rach
How to Measure Anything
by Douglas W. Hubbard
Marketing Professional Services
by Philip Kotler, Thomas Hayes, Paul N. Bloom
Naked Economics: Undressing the Dismal Science
by Charles Wheelan
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