Every entrepreneur has uttered the following phrase, “They aren’t paying me but ___.” The blank could be anything from “I’ll get free exposure” to “I’ll gain experience” or even something as simple as bragging rights a credibility boost. Of course, whatever you’re putting in the blank is enticing and sexy, but what is it really worth?
What, if any, impact will it have on your bottom line?
Let’s find out. You read that correctly; I’m going to show you how to put a value on those intangibles. It IS possible and it’s easier than you think.
Valuing the Intangible – The Approach
Take out a sheet of paper or open a new Word document. On the top put, “They aren’t paying me but…” Complete that statement by listing out all of your recent experiences. Write down anything that comes to mind. This is brainstorming, so don’t worry if it’s important or not, just write it down. Go on, I’ll still be here when you finish.
Done? Review the list and choose the one you believe has the most value or will take you the most time to complete. Warning: If you filled an entire page, you’re doing too much for free!
Take a fresh sheet of paper and answer the following questions regarding the specific statement that you chose from the brainstorming list.
a) Who will you reach? Is there a match with your target market? Be as specific as possible.
b) Will you gain valuable experience or develop a new skill doing this?
c) What is the credibility of the person or group with whom you will work? Is it relevant to your company?
Valuing the Intangible – Assessing Increased Exposure
Everyone wants publicity for their business. People can’t buy from you if they don’t know that you exist. Getting increased exposure is the most common reason for doing something without pay. If a major news program called up and asked to do a short segment on your business would you ask them to pay for the privilege? Of course not!
Unfortunately, not all publicity will help your business grow. You need the message delivered to your target market. Review your answer to question (a) above. If there is no overlap with your target market, there is no monetary value to your business.
If there is a match with your target market, calculating a value is easier than you think. If you wanted to advertise through that same venue, what would it cost? What would a 30-second TV ad cost? A website banner ad? Sponsorship at a conference? The cost to advertise is the value of the exposure that you are receiving.
Valuing the Intangible – New Skills and Experience
Unless we’re talking about doing a shark feeding cage dive (it’s on my bucket list – no joke), entrepreneurs seek new skills and experiences to expand their product offerings. Consider my example about serving on a board, with a long-term goal of obtaining a paid board position. Why establish credentials in a new field or for a new service? To sell a new offering at a profitable price.
What new product, service or opportunity do you foresee being able to pursue because you have this new skill or experience? How much profit do you realistically expect to make with this new revenue stream in the first 12 months? That profit is the value of gaining this skill or experience.
Valuing the Intangible – Gaining Credibility (and Sales)
You’ve been asked to speak at a conference and Ms. Super Expert of your industry is the keynote. Hobnobbing and photo-ops will abound! However, the organizers explain that since you aren’t a big-name expert, they won’t be paying you a fee to speak. Is it worth it?
Sharing the stage with, and potentially even obtaining an off-the-cuff endorsement from, a recognized expert in your field can build your credibility. There is extensive research that credibility materially increases the likelihood that someone will buy from you. This credibility can be conferred on you by an established expert – hence the onslaught of celebrity endorsements.
There is no magic formula for the specific amount of sales increase due to improved credibility. However, we can look at what a 1%, 5% or even 10% increase in sales would do to our bottom line. How does the increase in profit compare with the fee a speaker might expect to receive? If you decide to speak at the event, for the following 12 months, poll new customers to determine what, if any, role your pairing with Ms. Super Expert had on their buying decision.
Warning: This only works if the person has credibility related to your product or service. People aren’t going to hire me (The Numbers Whisperer™) because a fly fishing expert said I rock.
Pretty easy isn’t it? I’ll bet you didn’t even break a sweat!
There are three main categories of value that might be attached to an intangible benefit: 1) increased exposure and publicity 2) gain a new skill or increased experience and 3) increased credibility.
What have you done lately for a benefit that wasn’t monetary? What value would you now attach to it? Was the freebie worth the value you received?