Three Words about Investment to Add to Your Marketing Leadership Vocabulary

Soft” goals compete for resources with “hard” efficiency goals. To avoid essential, but difficult to quantify investments repeatedly losing this battle, enterprises must reframe strategic immeasurables into the positive terms they deserve.

Marketing investment is future-oriented. Future revenue, certainly, but increasingly more intangible benefits. Stronger agility, better customer experience, more diversity and inclusion, sustainability, innovation, and a more humane future of work - developing these attributes requires time and money. “Soft” goals compete with “hard” efficiency goals creating a decision-making muck.

Business is plagued by a lack of useful language to discuss this paradox. On one hand, efficiency, measured by ratios (e.g., return-on-investment, cost-per-lead, sales-per-store) is promoted as all good. Synonyms include effectiveness, competence, order, and productivity. Dictionaries propose exclusively negative terms to describe anything that erodes efficiency: disorganized, chaotic, slack, useless, ineffectual – the list goes on. I doubt anyone would call agility, innovation, or improved customer experience useless. But these are the words we have.

It’s a serious dilemma. When “soft” (i.e., difficult to quantify) investments redirect resources from “hard” (i.e., easy to quantify) metrics, essential and worthwhile ventures repeatedly lose. Smart leaders understand that marketing needs agility to respond to the unpredictable marketplace. To thrive in today’s environment, enterprises had better up their game in customer and employee experience. But while leaders try to assign value to these attributes, efforts are sketchy and not taken seriously. Value is often delivered in different time or scope signatures. Look into most investment conflicts and you find a tug-of-war between value today versus some future benefit or between local value and holistic or system-level value. 

More appropriate words will help. Words not only interpret reality, but they also create reality. Reframing strategic in-efficiencies into the positive terms they deserve will change the conversation into something more balanced. 

I found three terms that serve this objective. See what you think.

PREMIUM

A premium is a bonus, gift, or sum additional to the price of something. In his book, How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need Bill Gates proposes the term “Green Premium” to describe the additional cost of green energy above its cheaper, but harmful standard alternative. Gates’ proposed strategy is to immediately adopt all zero-carbon alternatives where the Green Premium is zero or low. For situations where the Green Premium is unreasonably high, invest in technology and innovation to lower the cost. 

Both the term and the strategy are genius. The premium concept produces greater tangibility while celebrating the investment’s value. The strategy offers a decision filter that prevents good ideas inadvertently being lumped with the unreasonable. It also puts efficiency in its proper place – as a way of making good things better rather than as a primary goal.

Premiums can be extended to other arenas. The cost of allowing employees more time to listen to customers would be a Customer Experience Premium. Hiring an additional agile squad leader for marketing would be an Agility Premium.  Expanding parental leave would be an Employee Experience Premium. 

GENERATIVE

Generative practices produce gains or restore benefits where monetary value is not immediately evident. This term is used in several fields (e.g., energy, environmental science, design) as the opposite of practices that extract and deplete. Generative includes an essence of giving. It’s not the same as philanthropy. Generative implies simultaneous growth and giving. 

Some normal business practices are generative. Training and learning, building products, and developing partner capability produce benefits for the company while investing forward in the company’s eco-system. Generative marketing practices include community marketing and the giving away of content, products, or intellectual property (as in open source) without the certainty of future gain. (Note that this use of the term generative is not to be confused with the capability of artificial intelligence to “generate” content or media).

Renaming normal business practices and grouping new ones in the generative category would aid the larger management team in understanding how they fit into strategy. Not all developmental investments belong in this collection – only those with eco-system benefits. However, it may be surprising how many intangibles fit here. 

EQUITY

Equity is the value assigned to immeasurables. In public company finance, equity is the residual value remaining after measurable liabilities are deducted from measurable assets. This vague equity category usually appears as a big lump.  However, it makes sense to entertain nuance. Brand Equity is already recognized in many companies. Leaders could talk about the improved Customer Equity gained from not spamming buyers with daily emails or Trust Equity earned from a more adaptive supply-chain. 

“Change your language and you change your thoughts”, said Karl Albrecht, management consultant and futurist. Efficiency remains important. But to thrive in today’s world, every company must also make difficult to measure investments. Reframing “soft” goals in positive terms will tip investment discussions in a more accurate and useful direction.