Maximize the Value in Your Business—Part III of III (Value Maximization)
Harness value extraction and value creation to get value maximization. See how businesses are maximizing their potential through a cyclical value chain.
This post is part of 3 of a 3-part series. For part 1, click here.
Over the last couple of weeks, we talked about identifying, capturing, and creating value in your business through Value Extraction and Value Creation. We wanted to wrap up this series by discussing concepts behind Value Maximization.
Maximizing value is a rather simple concept: create and DELIVER value to your audience on a consistent basis and in turn you will be creating value for yourself and your business. As you build additional value in your business, invest the proceeds into creating MORE value for your audience, and so on. The process should be cyclical:
Albeit an easy concept, maximizing value is not always as easy to deliver as it is to conceptualize. This is especially true when your business has yet to make any money and you’re wondering “ should I keep going?” Sometimes it takes months to start capturing value from your consumers.
Maybe it comes in the form of your first email subscriber or maybe it’s a comment on your blog. Whatever it is, use it as motivation to CONTINUE TO BUILD VALUE. Remember that business should be like dating, not marriage. You wouldn’t expect someone to pop the big question on the first date. Likewise, your audience doesn’t want to you pay you money on day one without getting to know you a little bit.
Think about when you first start a blog about a particular niche—say sports. When you publish your first post, chances are you don’t have a lot of credibility in the industry, especially compared to someone who has been doing it for a long time. BUT, if you continue to add value on a consistent and predictable basis, your credibility continues to build—as does your value. Pretty soon, your audience starts to trust you and the money starts rolling in—as an aftereffect.
Remember that the money will always follow value. In other words, value creation must come before value extraction. If you plan on doing it just for the money and can’t add some sort of real value, you may want to rethink your strategy, because like you, your customers are also seeking the best value.
OK, if you’re anything like me, you do like money, and would inevitably like to see financial gain from your business at some point. And let’s be honest, you wouldn’t go into business if you didn’t think it would eventually make money. The whole point of our platform is to help you MONETIZE your passions. So how does money fit into the equation? Well, the answer is, “in the exact same way.” Just like continuing to reinvest your time and energy into building value for your audience, you should reinvest money into your business in a way that will harness continued value for future business. Remember, it too should be cyclical.
It may seem counterintuitive, but the more you can GIVE to your business to add value—in time, energy, and money—the more you will GET in return. Maybe not right away, but your net return will almost always be higher when you give instead of take.
For example, imagine you currently have four customers who pay for your consulting service at $1,500/mo. Now say you later came up with a marketing report on their industry and think you could probably “upsell” it to your customers for additional money—so you make an extra $150 each ($600 total). BUT, what if instead of taking $150 from them, you GAVE them that report instead?
Before you call me crazy, what if I told you that your chances of getting a referral client just skyrocketed because you went above and beyond by continuing to build value for your customer? And instead of making $600, perhaps your referral just landed you an additional $1,500 contract… per MONTH. That’s way better than a one-time gain of $600.
The same goes for investing and reinvesting in your business financially. Let’s say you run ad campaigns that drive a 50% return on your money. So if you invested $5,000, you get $7,500 in return, or a net gain of $2,500. Not a bad pay day. Well, if you decide to take the money you earn and invest in a fancy computer for the office, it would probably make you pretty happy. Still not a bad day.
BUT, if you re-invested that money into your system instead (which you already knows gives you a 50% return on your money), you could turn that $2,500 into $3,750. And that $3,750 into $5,625. And so on. When you reinvest into building value into your business, your money actually makes money. And your value creates more value.
The key takeaway here is that money shouldn’t be your value driver, it’s just a vehicle to and and aftereffect from building real value for your audience. The harsh truth is that if you aren’t willing to build value for others, they won’t be willing to add value to you. But, if you can take a customer-centric approach to everything you do in your business, the money will come with time. When you’re looking to maximize value in your business (or in life), just remember:
Customer first… Customer always.
Money follows… Value in all ways.
Thank you for taking the time to read our post. We hope you enjoyed the series and would love to hear your feedback. Just leave us a note in the comments section below. Be sure to sign up below for exclusive offers, online business tips, and more!