In the days before the New York Knicks decided not to match the contract offer made to Jeremy Lin, an article in Newsday took a look at the decision to be made from a marketing point of view. And several of those interviewed said from that perspective it was a no-brainer. I would be to disagree.
Even if you remove from the equation the salary cap and the fact that merchandise revenues are split among the teams from the National Basketball Association, this decision, like any other decision regarding marketing needs to be looked at on a return on investment basis.
But as the Lin situation reminds us, there are two ways to look at ROI. The first, the most obvious and the easiest to determine is the tangible, that is the net cash your marketing effort brings in.
The one that is harder to measure is the intangible, which can be described as "goodwill." Goodwill measures the value of a business beyond its assets.
So in a marketing situation, the value is the brand and how it resonates with people who might be casual users of your product or services. As has been noted, Lin's personal brand had value with the large Asian-American community in New York.
But for Houston, Lin's brand was seen as a way to reconnect with the Asian community after Yao Ming's retirement. That is the goodwill it sees in the deal, which it hopes will lead to some tangible results.
In a mortgage context, this is seen mainly through the charitable work many mortgage companies undertake. These firms are looking to create and leverage a reputation for doing good work.
It could be as simple as "I know Johnny Loanoriginator. He coaches my son's baseball team."
So when you are preparing your marketing efforts, don't forget the things that bring goodwill. The cash return might not be immediately measurable but the effects could improve your profits.
