How Does a Company Assess its Communication Return On Investment (ROI)?


By michelleshippel, 5 May, 2014

What is  Return on Investment (ROI)? Does one size fit all businesses? How does one assess ROI when it comes to communication, and particularly the training and coaching of communication skills? If your business is not grappling with these questions then it is likely missing out on a critical component of improving sales, customer experience, staff satisfaction, improvements in productivity and increases in revenue.

Communication skills are often taken for granted. This is ironic, as it is the lifeblood of any business. If one considers the five areas mentioned, each one is directly or indirectly reliant on effective verbal and non-verbal communication skills. Understanding how effective an employee is at applying their skills and knowledge in the way they communicate is an essential component in determining whether there has, in fact, been a return on investment and a closing of the skills gap. 

Businesses tend to only consider the direct impact that expenses have on their bottom line, and for this reason the development of communication skills is often harder to justify. The indirect impact that improved communication has, is far more valuable than most managers and executives are prepared to admit. So let's take a closer look at these five areas and how communication training and coaching has a positive impact on employees, the business and its customers.

Sales is the lifeblood in every business. It has become an increasingly challenging and demanding function, having a direct impact on a business' profitability.  Sales is also no longer confined to only a sales team. Everyone within a business must be on the lookout for new opportunities to do business. How one communicates with and relates to other people, especially potential customers, is of vital importance.

Sales improvements are immediately measurable in a number of ways. Establishing how much of a difference communication training and coaching makes over and above other factors allows management to calculate the return on investment. Communication assessments, measuring interpersonal skills, clarity of speech, assertiveness and other factors make this distinction easier to identify. The human interaction and communication components of sales require measurement, since sales has become far more relationship oriented. 

Customer Service   
Customer service allows for the opportunity to on-sell, up-sell and is essential in retaining existing customers. A business and all its client-facing employees must foster a good relationship with customers.  Customer service does not only entail treating a customer respectfully and providing good products or services at competitive prices. Taking the time to establish a relationship  with customers and communicating effectively and empathetically, however enhances the perception of service excellence. Looking after one's customers and communicating more effectively creates new opportunities for business to be done at a lower cost of sale where the business relationship has already been established.

Staff Satisfaction 
Every business, whether service or product-based will at times forget about its most valuable asset - its staff. A happy staff is a productive staff. A happy staff results from being satisfied in the workplace and this is usually due to three main reasons:
  1. Staff enjoy what they do, so they do it willingly
  2. Staff are remunerated fairly
  3. There is clear and transparent communication between the various hierarchical levels within a business.

Effective communication, in fact, forms the basis of any happy staff, whether that communication comes in the form of: understanding one's specific job role, being involved in a meaningful 2-way dialogue (in the case of suggestions, appraisals and similar internal discussions) or just developing team unity and constructive criticism. Without proper internal communication there cannot be true staff satisfaction and staff turnover rates increase, having a profound impact on a business' recruitment costs - and ultimately its bottom line.

Productivity has a direct impact on the sustainability and profitability of any business. Firm but fair communication is an essential factor in motivating and encouraging employees, as well as dealing with issues of conflict, complaints and job effectiveness. An unmotivated and under-appreciated (verbally) staff tends to be be more involved in negative self-talk. This has a dire effect on morale and productivity. Reduced levels of productivity may result in an increased number of dissatisfied customers, meaning that both the sales and customer service departments have to work even harder to retain those customers. This has a direct impact, once again, on the cost of sale and keeping clients. Effective verbal and non-verbal communication from suitably skilled supervisors and managers goes a long way to minimizing this downward spiral in a business. These skills are equally necessary for lower level employees, so that they are equipped to express themselves without having to go to such extremes as strikes or mass action.

All four of these key areas are impacted by the way that businesses, supervisors, managers and leaders interact and communicate with their employees. All four have a direct or indirect effect on a company's bottom line, and all four are dependent on various communication skills, both verbal and non-verbal, being suitably managed at both individual and group levels. What business can, therefore, afford not to train or coach their employees at all levels?

Whether it is sales, customer service, productivity or staff satisfaction, effective communication is imperative. The "soft skill" of communicating  positively has been overlooked by many businesses and training or coaching in this skill  has often been disregarded as showing a return on investment. Nothing could be further from the truth.

 ~ Michelle Shippel is a speech and communication specialist and the MD of Talkwell Communications. She can be contacted on