Digital signage is quite often touted as a powerful marketing tool, capable of delivering immense returns on everything from sales to hotel reception. But, while it’s easy to make claims that digital signage decreases perceived wait time by 33% or increases sales at Point of Sale by 23%, it’s significantly harder to track and measure return on value once you’ve installed digital signage in your own place of business.
That’s natural, considering the benefits of digital signage often relate to customer satisfaction, employee efficiency, and user experience. Those things are difficult to measure. And, tracking an increase in sales and directly linking it to an ad or display can be difficult without a customer directly stating they’ve made a purchase because of that display. So, how do you measure and actually valuate whether your digital displays are a good investment?
Understanding What You’re Starting With
It’s impossible to recognize improvements if you haven’t benchmarked what you started with. Taking the time to review data points for key performance indicators of note is critical. Note what you’d like digital signage to improve.
What are the goals of the installation? Assess the current state of your organization and benchmark that data. This may involve interviewing customers, employees, or both depending on those goals.
In most cases, all digital signage goals will boil down into increase customer happiness, improve employee productivity, or drive revenue.
Some common goals for digital signage include:
- Drive ad revenue from third-party brands (Drive revenue)
- Promote products to increase sales across the store (Drive revenue)
- Draw in customers (Drive revenue)
- Add mood to create a better atmosphere (Customer happiness
- Provide a better customer experience (Customer happiness)
- Streamline services (Customer happiness)
- Direct visitors across grounds (Customer happiness)
- Assist employees (Employee productivity)
- Offer educational content (Customer happiness)
- Synchronize rental data across displays (Employee productivity)
Write up your own goals, measure them, benchmark data, and establish a second point to measure new data after installing displays.
Digital signage networks are not cheap. In addition to the (high) costs of deployment, you must continue to pay for networking, maintenance, updates, security, and content creation.
Depending on the size of your network and content needs, this may range from low costs of a few employees to manage software and hardware and an Ad manager to high costs of an IT team or monthly cloud costs.
You have to quantify:
- Initial costs (total)
- Ongoing costs (including percentage of IT team, percentage of time the person updating displays spends on it, percentage of time individuals spend maintaining and monitoring displays, etc.)
- Content costs (including internal costs of requesting, editing, and reviewing content if content is sourced from a third-party agency. Your organization is still paying for a secretary sending an email.)
Establishing total costs is impossible without first installing your network and running it to determine what actual time expenditure and costs are. However, you can estimate quite well upfront to get a good idea of what those costs should be.
Valuating Intangible Results
What is a 33% reduction in perceived wait times worth to your organization? If you run a hotel, likely very little. If you run an amusement park, likely quite a lot.
Estimating return on value from digital signage can be difficult because the returns are often intangible. Customers walk away less annoyed. People are more informed and make a better choice for their product, leaving them more satisfied. Guests safely navigate an airport and don’t hold up a plane by being late. Guests are delighted to be able to brand their conference hall and use the digital displays in the room for their own presentations.
Most of these intangible benefits link to very clear business results. And, if you can successfully link them, they are measurable. Others not so much. Less annoyed customers are more likely to come back, it contributes to customer lifetime value. As does helping the customer to make a better product choice. The airport in this equation clearly saves themselves possibly thousands by avoiding airline delays. And, the hotel increases customer satisfaction.
If you understand how goals link to business results, you can measure ROI.
Calculating ROI for Digital Signage
In some cases, calculating the ROI of digital signage can be simple. Take the total costs over 18 months and divide by total increases in sales of advertised items, total increases in order value, or total increases in average customer lifetime value. You can also look at increases in productivity, time saved by staff, or reductions in needed hardware and software elsewhere in your organization.
For example, if a digital timesheet reduces overlapping schedules and missed shifts, you’re improving productivity. If a digital signage booking system reduces overbooked rooms, you increase productivity and improve customer satisfaction.
Chances are, you’ll never be able to exactly calculate what results from digital signage and what results from other efforts. That’s okay, because calculating return on value is almost never an exact science, it can’t be unless you’re dealing with very tangible items, such as sales of a product linked to digital clicks.
However, you should be able to roughly calculate improvements, especially if you have a strong understanding of where you were on each point of improvement before installing digital signage. Over time, you’ll be able to see what has significantly or statistically improved, and you can test what’s improved or not with A/B tests on digital signage, promoting different products, offering different solutions, or even utilizing or not utilizing displays across different locations.
Digital signage can add value to many organizations. Tracking that value heavily relies on your ability to benchmark KPIs before installation so you have something to work from and towards.