Quantification and Qualification of ROI

It is very important to measure your business success and expenditures based on qualify-able and quantifiable indicators. So many businesses only look at what they are worth based on balances, inventory and other accounting terms. But take Coca Cola for example, their name and brand is worth more than all of their inventory, cash, employees, factories etc.. But how do you quantify the brand "Coca Cola", the most recognized brand in the world? The answer is that you can't quantify it until someone makes an offer to buy it or a decent estimate is made through thoughtful, thorough and professional analysis.

My partner often talks about ROI (return on investments) regarding how many direct sales we make when we advertise or have an event. My answer to his questions vary but I always remind him that there are more benefits to these investments than direct sales, such as the qualities that one must qualify and not quantify: how much have we spent on our branding and how much is it worth to us that countless magazines and trainers now publicly support our brand and mission? How much is it worth to the boutique that I stood in front of  in the cold selling toys? Answer: a lot!

How do you quantify things like brand equity that are only based on quality or qualify-able? Until someone makes a cash offer, the worth of these things is technically $0 but in reality, aside from the toys themselves, and possibly including them, our brand, supported and fortified is the most valuable part of our company.

When you are thinking about an investment, always make sure that your are weighing in more than just the quantifiable and always think about the intangible aspects of business. If you are a chart person, make a 3 dimensional chart with 3 axis and plot points for your sales and growth but also plot the value of your brand equity, relationships and the rest of the intangibles that make a businesses successful.