March 28, 2017

Confusion about intangible benefits

There’s a lot of confusion about what an intangible benefit is, so let’s back up and define the term.

I like this definition from BusinessDictionary.com:

Subjective benefits that cannot be measured in monetary terms.

To paraphrase:

“Business outcomes that the client wants, but that can’t easily be assigned a specific dollar value.”

Notes:

• An intangible that the client does not recognize as a benefit is not an intangible benefit. It is merely an intangible.
• Just because an intangible benefit can’t easily be assigned a dollar value, does not mean it can’t be measured. It just means it won’t show up on a balance sheet anywhere.

Examples of common intangible benefits:

• Increased customer satisfaction
• Enhanced user experience
• Improved employee morale
• Enhanced brand equity

These are all business outcomes that are typically valued by clients, but are hard to assign a dollar figure to (i.e., intangible benefits).

However, you could easily come up with ways to measure an improvement in any of these, AND the client could place a rough subjective value on the degree of change.

Examples of intangibles that are NOT benefits:

• I’m passionate about my work
• I write elegant code
• I share your worldview
• I have lots of experience
• I’m really easy to work with

Note that these are intangibles (i.e., hard to assign a dollar value) but they aren’t benefits to the client. They might LEAD to intangible benefits, but that’s not the same thing. Connect the dots for them by extrapolating an actual benefit from your intangible.

Yours,

—J

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