How Do You Quantify an ROI on Giving?
By Angie Patrick
Director of Corporate Sales and Business Development
Scrip Companies / Massage Warehouse
Many investment options come with a defined return at the end of the day. Either your money was well placed, or you have sustained a loss. Black or white -- very little gray.
Many companies are wired for this type of expenditure, and expect to see a monetary return in double digits. This is certainly a sound business practice and a model that we all hope works. But when it comes to donations, sponsorships or product support for organizations, events and individuals, many companies have a difficult time justifying this outreach, especially in times of economic strain.
So many other things are calling for our attention and resources: fuel charges, shipping, overhead, spending reductions, headcount, cost of goods, insurance, product development and more. It is often hard to see the value of giving on the bottom of black and white ledger sheet. I can tell you it is a leap of faith to maintain the philanthropy as a mainstay in your business model due to the need to maintain a certain level of profitability. While striking this balance may not be easy, I believe it is worth it. I can also tell you there is a return that may be more important in the long run and may prove to be more valuable than money for your business.
People gravitate towards good intent. People love to see a company giving back to the community. People have a higher chance of seeing your company if it finds ways to contribute, and your name is affiliated with an outreach. In addition to the greater exposure opportunity outreach can provide your company, it also can set you solidly in the minds of your customer as a thought leader in your niche market, and set the bar a bit higher for your competitors to meet.
For example, a company that is fully engaged in the community it serves, via trade shows, sponsorships, education, resource blogs, information pages, and more will represent itself in the mind of the consumer as the go to leader for support, purchases, investments and expansions. Why is this? It is because you are involved and have a finger on the pulse of the community you serve. A consumer is far more inclined to become a patron of a company whose name is synonymous with positive outreach and support for the community and for the ecology. It gives them a warm fuzzy feeling, and since most buying decisions are driven by emotion, making sure your company is doing what it can to remain philanthropic in lean times keeps you positioned in the lead.
It may not be a clear dollar amount for your return, but when you consider the positive impact you can have on a community, and how a marketplace can embrace that and feel a kinship towards your brand based on your willingness to give, you can certainly see the value of giving for the long term.
Please do not misunderstand me; the intent of giving should never be motivated by what you expect to gain, but rather what good you can do. The natural by product of doing what you can for the right reasons is inevitably going to bring this energy to you. The importance of any company to lend a hand and do what they can cannot be underestimated. And the yin to that yang is the goodwill you build along the way.
About the Author:
Angie is the creator of The Massage School Makeover, a partner in the American Massage Conference, and also a columnist for Business Building Blocks in Massage Today. She is also the facilitator of the philanthropic project, Sanctuary. She can be reached at Apatrick@scripco.com.
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