In an always changing and competitive environment, public relations professionals are required to communicate their value to employers and clients more now than ever. In this session, Dennis Gayle of First Bank and Trust of Indiantown provided FPRA members with the tools (and definitions) they need to communicate to CEOs and organizational leaders about the impact of public relations to the bottom line.
Time for us to put away our Mac Books and sharpen our pencils (or at least learn how to use the calculator application on our iPhones!).
PR Departments: Profit Center or Cost Center?
According to Gayle, “the goal of any corporation, economics 101, is to maximize shareholder wealth.”
Ask yourself…does your CFO view your department as a cost center or a profit center?
HR, marketing and PR departments often find it difficult to show profit and are viewed as “cost centers” within their organizations. But as Gayle points out, at the end of the day, all departments can add to the bottom line.
To affect the bottom line, companies look to increase income or decrease expenses. PR professionals must show their benefit to the “top line” – income.
PR departments must recognize that they are a component of the profit & loss statement. Understand it. Use it as a tool.
Defining Quantitative vs. Qualitative Measurements
PR professionals often operate on qualitative values. The dominant collation, CEOs, CFOs and boards, operate on the quantitative side. PR professionals must learn to communicate with the “black and white” side of their organization – they must sell to their internal audience!
To do this, identify goals on the front end (number of people reached, increase in sales, etc.) and partner with sales teams or other departments to show your value in supporting their efforts.
Predicting Your Results
PR and marketing professionals can use the following equations to predict their impact on the budget.
(% existing market share) x (audience) = # of potential new clients
(# of potential new clients) x (average client profit $) = anticipated sales increase $
*assumption is that your market share will stay the same
Return on Investment (ROI)
ROI = the ammunition needed to communicate PR and marketing’s value to the organization. Follow this simple equation to estimate a project/campaign’s ROI:
(new sales $) – (project costs $) = Profit $
(profits) / (costs) = ROI %
Using these formulas PR professionals can…
- better communicate to CEOs that PR/marketing dollars are effective in driving the company forward
- assist departments in getting more resources for their efforts
- build credibility with CEO/CFO
Since numbers don’t tell the whole story, Gayle suggests PR professionals must report solid examples from “the field” and show how qualitative goals add value in enhancing the organization’s image and awareness.
About the Speaker
Dennis Gayle is the senior vice president, commercial lender at First Bank and Trust of Indiantown. Gayle is responsible for commercial lending and business development throughout Martin, Okeechobee and Glades counties.
Gayle is an experienced banker with a 24-year career history as a commercial lender. Prior to joining First Bank and Trust of Indiantown, Gayle was with IDS Corporation in Stuart where he specialized in SBA market development. He is a graduate of the Florida Commercial Lending School and earned a degree in Business Administration from the University of Florida.