Understanding Long-Term ROI: Key Concepts
I've heard all the misconceptions. I Believe people often talk about 'roi' - like it's this one single thing, clear-cut, linear. Not true.
At least not from what I've seen. It's this living, breathing idea that means different things to different people at different points in time - depending on their goals and where they're at. It's fairly common for people to look for the cheapest and fastest option for everything, and then sort of equate it with ROI.
That math doesn't really check out if you think about it. It's not just about saving money but also making sure every penny counts. So, if a particular investment can deliver much more returns than its competitors while costing a tad more upfront, isn't it still the smarter pick.
Now here's where it gets slightly confusing - there's no clear definition for what ROI can mean in the context of a business or an organisation's long-term growth plans. And that's where value comes in. As in - not all returns are tangible or measurable with cold hard numbers; some are emotional or cultural or social - and have long-term benefits that cannot be immediately measured against an investment. If you want to build an empire that stands the test of time (I'm talking years and decades here), then value-based investments that help your brand matter and last are most definitely the way to go.
Strategy 1: Investing in Employee Development
I think most leaders see employee training as a one-off activity, an expense line item that will yield results in the short run. Once the annual budget is assigned to a session or a couple of seminars, thatâs about it for learning and development for the year. But what happens then. More or less.
Employees are left feeling less engaged, more disconnected from their teams, and have little to look forward to in terms of learning something new. The way I see it, the reality is that investing in employee development is directly tied to your business outcomes - higher engagement, increased productivity, and a healthy return on investment. Itâs not just about training but truly empowering employees to learn continuously and develop into future leaders.
And this requires time and money - two resources that are always in short supply. What if instead of waiting until you had those two figured out, you took small steps towards developing an organisation-wide culture of learning.
A quick win could be adding a question about what they would like to learn on your weekly catch-up agenda with your team. More or less. Or maybe as part of your monthly all-hands with the larger organisation.
The information you collect from this can give you an insight into where people want to go in their careers, how your business can help them get there, and what skills they might need. Of course, itâs not easy. There is no set playbook for investing in employee development that works across industries or organisations. You could take inspiration from larger companies but ultimately, you will need to carve your own path when it comes to creating programs that work for you and your employees.
But taking this step sets up your organisation for long-term sustainable growth while supporting employees to learn new skills and develop their careers with you at the centre of it all.
Strategy 2: Embracing Sustainable Practices
I think a lot of folks see sustainable business as a huge, expensive pivot or maybe even a way to box themselves in creatively. Like itâs this all-or-nothing thing. People get caught up in the optics and storytelling and, yes, those things help - but theyâre far from the whole picture. The reality is: itâs not about going green overnight.
At the core, real sustainable growth is potentially about being able to keep doing what youâre doing without burning out people or resources (and I donât mean just paper and plastic). It goes beyond eco-friendly packaging and recycled stuff - itâs about business fundamentals like paying a fair wage, investing back into staff, and keeping an eye on supplier ethics. You want staff who stick around, customers who stay loyal, and partners who arenât running sweatshops halfway across the world.
Itâs all about building a brand that can stand the test of time - knowing that people might even be willing to pay for more sustainable practices if it aligns with their own values. The market appears to be heading there anyway - with Australia legalising modern slavery and demanding transparency on supply chain logistics for businesses bringing in over $100 million annually (soon lowering to $50 million), sustainability seems to be becoming the norm rather than an exception. And I know what youâre thinking - these are some big numbers for most small to medium scale businesses.
But thereâs no need to go zero-to-hundred here; start small with employee engagement or by working more closely with local suppliers. Take it slow and steady; youâll find that the return on investment feels much sweeter when you see both monetary returns as well as long-term positive impact on your industry and brand.
Strategy 3: Leveraging Technology for Efficiency
Most people think using technology for efficiency is about being quick on social media or using the best apps to cut back on admin. Maybe thatâs true on the surface, but that mindset often means we let tools drive our businesses rather than the other way around. I think a lot of business owners hand over their operations to a dozen pieces of software and expect it to save them time and money, but what really happens is we drown under subscriptions, donât use half of whatâs available, and often miss out on the kind of innovation that comes from a business being, well, human. So what do I mean by that.
Technology is supposed to make our lives easier, not more complicated, so if itâs making things harder, then itâs not working. I always thought running a business would mean hiring loads of staff and spending a fortune on admin tasks. But after running mine, I realised technology could be my assistant or even my entire back office if I wanted it to be - but only if I use it wisely. If youâre making use of the right tools for you, then the next step is to stay up-to-date with what youâre using.
That means making sure youâre taking advantage of all the new features and any training that comes with them. If there are upgrades being rolled out, ensure youâre the first to know about them. Usually these are aimed at making usersâ lives easier, but if they arenât and are starting to cause headaches, then perhaps itâs time to do some research into better options. Of course, this is easier said than done because there are countless options in each category and each business will need something different depending on how they work and who their customers are.
Thereâs no right or wrong answer here - even though there are countless articles online claiming certain platforms are better than others - because at the end of the day as long as itâs helping you save time or money, then itâs doing its job.
Strategy 4: Building Strong Customer Relationships
Most people get customer relationships wrong. They think rewarding loyalty and slapping a stamp card in the hands of your customers will do the trick. Strikes Me As it gives you something to believe in, i suppose, but thereâs more to it than just giving loyal customers a discount.
What does loyalty mean. Repeat purchases or an emotional connection. Building strong customer relationships depends on your business model but hereâs the thing - whether youâre B2B or D2C, relationships can only happen when both parties are somewhat happy with one another.
In other words, offering a lower price and expecting your customers to come running back isnât enough. You have to add value for them too. We also see most businesses make the mistake of prioritising loyalty over retention.
What does that mean. Sort of. It means they focus too much on repeat purchases and not enough on improving engagement and customer lifetime value.
Sort of. So their customers might be loyal but not really profitable. Now with technology and all this data tracking, itâs easier than ever to retain customers by being relevant and timely, so why arenât most businesses succeeding at building strong customer relationships.
The truth is likely - it comes down to culture. If your business culture is built around knowing what matters to your customers while ensuring retention strategies are baked into processes, you can leverage technology to make a difference.
Strategy 5: Diversifying Revenue Streams
People tend to think diversification means opening new stores or launching extra product lines. The more the merrier, right. If only it were that simple.
As with most things, the âwhatâ is easy to define - itâs the âhowâ and âwhenâ that ends up tripping folks up. It seems like ârevenue streamâ is rather a fancy way of saying âways you make moneyâ. In retail, it could mean more than just selling products at the till.
You could branch into services, special events, online stores, collaborations with other brands, vending machines, licensing your brand, workshops, or even good olâ fashioned tea and biscuits for your VIPs. There are a whole host of ways to boost earnings that donât directly involve your core offering - and those can be tricky to identify if youâre not keeping an open mind. Truth is, expanding product lines or opening more stores is not always profitable - especially in markets where every seller is doing this exact thing.
It seems counter-intuitive but sometimes selling less of a unique offering can prove more lucrative than selling plenty of goods or services in a saturated segment. Because retail is an industry with very tight margins, businesses have to take calculated risks when introducing new streams of revenue.
The other reality many retailers struggle to face is their over-reliance on a single money maker. Itâs hard to hear but itâs equally hard to let go when your business depends so heavily on that one magic bean. This is why adding new ways of making money becomes so important - and so daunting.
The good news is you donât have to do it all at once. The wisest moves start small and grow steadily over time as you learn more about what you can do differently and how your customers respond to those changes.