Value, Profit, and YOUR Small Business — Part 2 guest post by Bob Burg

We’re super excited to have Bob Burg, best selling author and speaker come by for a two-part post this week on value and profit. Read part one here.

communicate valueIn the previous post, we looked at the importance of understanding that to be successful as a small business owner in this – or any – economy, the value (relative worth or desirability) you provide to your customer must be greater than what they are paying in price.

You make this point through one very important concept, and that is:


Effectively Communicating Your Value

How do you add value that well exceeds the price you are charging? There are perhaps hundreds of individual ways, but they tend to fall into five categories that we call, Elements of Value. They are:

  • Excellence
  • Consistency
  • Attention
  • Empathy
  • Appreciation

To the degree you can communicate all five of these in your dealings, you are practically guaranteed to be seen as an asset of value to your customers and clients; resulting in repeat business and lots of referrals.

On my Facebook page, I suggested that success for small business owners comes from focusing on giving value, and then allowing the receiving that is the natural result of such. Why? Because…

“Money is simply an echo of value. It’s the thunder to value’s lightning.”

As part of a subsequent exchange with one small business owner, Duane, he asked:

“In order to aid ‘focus’ which ‘Metric’ would you use to measure Value Delivered? Income Statements and Balance sheets measure only echoes’.”

I responded: Value is ALWAYS in the eyes of the beholder and is measured by THEM. When THEY see “it” being of value, that’s when the echoes begin to form.

Duane replied:

“Agreed. And they “vote” with their wallets. Thus the “Metric” or “KPI” (Key Performance Indicator) I was looking for to determine if we are delivering value can be measured by the Metric “REVENUE”. So when we as a company ask ourselves…”Did we Deliver Value today?” we can look at our Daily Revenue number to determine how much.”

I appreciate how he phrased that. One important point, however, is that the value provided and the resulting monies don’t necessarily occur on the same day. So, there can be a lapse in that regard.

Which is why, whenever I’m asked for examples of companies that are “Go-Giver Companies” my answer is always to simply look at any company that has a record of sustained profitability.

The reason is that, assuming they are operating in a truly free-market economy — without benefiting from cronyism or corporatism — the only way they can sustain profitability is by providing exceptional value to many people on an ongoing, consistent basis.

And, yes, that value is judged by the consumers and only by the consumers.

And, as Duane so eloquently put it, they vote with their wallets.

Remember, it’s the consumer who ultimately makes the decision. And he or she says yes only if they value owning the product or service more than the money they are being asked to exchange for it.

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bob burgBob Burg is coauthor (with John David Mann) of the International bestseller, The Go-Giver. Published in 22 languages, it has sold 300,000 copies and, along with its follow-up book, Go-Givers Sell More, is used as a training manual for numerous companies and organizations. To download Chapter One visit www.burg.com.

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