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The Softer Side of Marketing ROI

mother henI hear the terms “hard ROI” and “soft ROI” quite a bit, so I want to evaluate what this means in a two-part blog series.  First, I will look at what is meant by “soft ROI,” since I’m feeling warm-and-fuzzy today. The next post will cover how to measure it.

In reviewing what others have to say about soft vs. hard ROI, soft ROI is described as those activities that lend a human face to a company, earn trust for a brand, increase positive image, increase collaboration, help to recruit and retain high quality personnel, shorten costly cycles, and so on.  Generally, it is those benefits that are difficult to measure but help to achieve worthwhile objectives.

Some activities of soft ROI, being more qualitative, may be:

  • Engaging people as part of something larger then themselves.
  • Making people proud of who they are and their values.
  • Providing an experience, rather than just a product/service, that can be passed down to their children.
  • Giving people a voice in how resources are used or treated.
  • Soliciting the best of the character in a person.
  • Allowing people to participate in a process that improves a situation.

So how can we put increasing soft ROI into business practices?  I’d like to using as example a product that could benefit from a focus on the softer side of ROI: eggs.

  • I would rather buy eggs, even if it costs me more, that are Certified Humane Raised and Handled®.
  • I would like to participate in a community that believes in and promotes the purchase of Certified Humane Raised and Handled® products.
  • I would like to visit farms that participate in this program and share that experience with young people.
  • I would like farms that participate in this program to install video cameras in their facility to view their treatment of animals online.
  • I would also like those farms to enlist their community of purchasers in discussions about how to improve their treatment of farm animals  (e.g. hens beyond their prime egg-laying years could be adopted).

In the effort of creating hard ROI we have to be mindful to create soft ROI results as well, which is also good for business and creates long-lasting results.

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  1. October 6th, 2009 at 01:44 | #1

    Thank you for articulating this important distinction. The challenge for me is that the effect of operational actions (soft ROI) are becoming increasingly more important but harder to track. In my view, stuff like engaging consumers, sharing values, providing experiences are very powerful ways to drive business (by helping to increase loyalty and advocacy), but are often placed in the ‘too hard to measure’ box so not executed.

  2. October 6th, 2009 at 04:07 | #2

    Hah!! “soft ROI” sounds like the new “Branding”! As a both business owner and marketing guy, I’m very apprehensive of spending time and resources on marketing efforts whose outcomes can’t be measured. When there are more strategies that produce measurable results than most business owners will ever have time or money to execute, why spend any time on intangibles??

    Enjoyed the post.

    Ben

  3. October 6th, 2009 at 09:45 | #3

    @Ben

    Hi, Ben.

    I used the egg example as a way to show why spending time on intangibles is important. If a farm used these soft ROI activities, I would spend more money with them than on other eggs, go out of my way to seek them out, would advocate them to others, and would be loyal to them because they are in alignment with my belief system. The “new branding” that you speak of, is exactly this…people are looking for companies that are in alignment with their belief systems.

    Best,
    Rebekah

  4. October 7th, 2009 at 08:57 | #4

    @Urs E. Gattiker

    Hi, Urs.

    What I shared was not measurements of soft ROI but activities of soft ROI. I felt that explaining the activities was of benefit to allow people to understand what it is and how to perform it. Perhaps I will now do a posting on how to measure it. :-)

    Best,
    Rebekah

  5. October 7th, 2009 at 10:15 | #5

    A posting on how to measure would be interesting

  6. October 7th, 2009 at 13:04 | #6

    Great blog! Allow me to be a bit more critical of the term “soft” ROI. In a way, “soft” ROI is like vegetarian meat. Just because you call it meat, make it look like meat, and even make it taste somewhat like meat doesn’t make it meat. Call me a purist, but to me, the whole idea behind ROI is to offset benefits against investment while hoping for a positive result.

    No one will contest that there are benefits to employee & customer retention, to brand awareness & brand trust, to engaging customers, to sharing values, et cetera. But put in the context of ROI, the question is: will the benefits outweigh the related costs? And that’s a fair question. How else do we determine what’s the right cost for realising these benefits?

    I do recognise that it isn’t always easy to measure the effects of these “soft benefits”. But that doesn’t mean it is impossible. If we state that these “soft benefits” are powerful ways to drive business, then we must be able and ready to support this with data.

    Hence my opinion: much like there is no such thing as vegetarian meat, there is no such thing as soft ROI.

  7. October 10th, 2009 at 10:36 | #7

    Everybody likes to show how well they embrace “hard ROI” but I agree with Rebekah that there are marketing activities you should pursue that cannot easily be measured but that return benefit. Rebekah may not agree on my choices of examples, but let’s take participating in a conference where you are a Keynote Speaker. You can “measure” it by 1) how many business cards you get 2) an analysis of the quantity and quality of the audience (that probably the organizer has to provide you) or 3) did we get any orders from this audience? But 1 and 2 are not real ROI until you can link them back to dollars (or euros in my case). And 3 may have such a long sales cycle (and you may not have a list of all audience to track.) So my hard ROI bean counters may ask me not to make the speech…But what if that speech influences decision makers that then more readily agree to meet with my sales reps? That’s worth something sure but the cost to measure than may preclude HARD ROI whereas common sense tells you if it is an audience of industry buyers, it is worth the time to try. (My bean counters here are saying we will catch the ROI if we add my speech to the How did you hear of us? question for all new customers… but maybe we will and maybe we won’t– and in what time frame?) It is of course desirable to make all marketing HARD ROI but especially in small business– the cost to really measure is outweighed by common sense. Even some of the “measuring” that takes place to justify trade show marketing, magazine ads and PR really is not accurate or true measurement: it is just an exercise where someone is trying to prove to others what common sense has already dictated. It’s not all Science.

    Reminds me of ZEN & the ART of MOTORCYCLE MAINTENANCE where the lead character is a professor driven crazy trying to intellectually quantify QUALITY and ends up finally concluding: You’ll Know It /Feel It When You See It.

  8. October 11th, 2009 at 11:46 | #8

    @Bob Snyder

    Hi, Bob.

    I do like your choice of examples!

    Best,
    Rebekah

  1. January 1st, 2010 at 16:44 | #1

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