The Truth About Your Value
“Money is an echo of value; it’s the thunder to value’s lightning.”
Most people intuitively understand this very basic characteristic of Free-Market Capitalism; that we are rewarded for providing value.
The key is understanding that the value comes first. The money is simply a natural and direct result of the value you have provided. And, the more value you provide to a larger number of people, the more income with which you are rewarded.
But, when posting the opening quote as part of a blog post, I received a question from a skeptical reader. He asked:
“Does this mean if someone does not have much money, they are not valuable?”
I appreciated his question because, while his interpretation is not one I would have considered, obviously, since he did, the chances are that others did, as well.
My response was:
“It doesn’t mean that at all. Every human being has great intrinsic value. But it does mean they have not found an effective way to bring or communicate that value to the marketplace.”
Another reader, Amy Wells, a bridal shop owner in San Antonio, Texas, responded:
“I can attest to Bob’s explanation because, as I’m learning to communicate my value to my marketplace, my ‘net’ is getting fuller.”
And, there’s more to Amy’s story which I believe makes a very strong case for what we are discussing.
Amy’s Decision To Communicate Her Value
Amy attended one of my live events in San Antonio where she became inspired by the explanation of The Law of Value from, The Go-Giver. This Law says: “Your true worth is determined by how much more you give in value than you take in payment.”
No, this certainly doesn’t mean you give things away (of course, giving away a free report or video in order to attract a new customer and demonstrate value is a terrific business strategy, but not what we are discussing here).
And, it certainly doesn’t mean you don’t make a profit. Far from it. You make an excellent profit.
So, how does this work? After all, giving more in value than what you take in payment sounds counterproductive at best and, at worst, perhaps even a recipe for bankruptcy.
It’s very important to understand the difference between price and value.
Price is “a dollar amount, a dollar figure.” It’s finite.
Value, on the other hand, is “the relative worth or desirability of a thing to the end user or beholder.” In other words, what is it about this thing; this product, service, concept or idea that brings with it so much worth – or value – that someone will willingly exchange their money for it and be ecstatic that they did…while you make a very healthy profit.
Example: You hire an accountant to do your tax returns. He charges you $1000. That’s his price. But, what value does he provide you in return? Through his expertise, he saves you $5000 in taxes, he saves you hours of work, and provides you with the peace of mind and security of knowing it was done correctly. He provided you both concrete value (the savings) and conceptual value (peace of mind = priceless).
You feel terrific about it and he made a very healthy profit.
He gave you more in value than what he took in payment. Not only did you both win, but you both won big.
This is the essence of a Free-Market based exchange: both parties come away much better off than they were before the transaction. These exchanges increase prosperity both for individuals and for society. It’s why true Capitalism (not to be confused with Cronyism) raises the standard of living for all.
So, what happened with Amy?
She decided that, from now on, rather than discounting the wedding dresses as her prospective customers expected (which, apparently is the norm for her industry) she was going to sell at full retail price and do a much better job of selling on value.
First though, she had to become conscious of the value she provided. After all, how can you communicate your value to others if you haven’t embraced it yourself?
The following is excerpted from an email Amy sent me:
“Bob, of the many things I learned and am implementing daily, the most surprising is what the ‘Price vs. Value’ teaching is doing for me.
“From this, I walked away with a heart understanding that the value I offer to my brides is my experience, expertise and assurance of the perfect delivery of her wedding gown for her very special day.
Furthermore, I have the value of being in the top three of every designer I carry, and I have a lot of influence with them on delivery dates, custom changes, etc. That can only be offered by me and two other salons in the nation. I have now embraced the realization that what I offer my brides is of real value.
“I’m amazed by the additional money I’m netting for walking in my value. I used to easily give discounts, as I wanted each bride to be able to afford the dress that was ‘THE ONE.’ And, I didn’t want price to stand in the way of her dream day. Some brides even threatened to get it elsewhere.
However, as a result of your talk, when brides ask for a discount, instead I offer them me. I’m able to articulate the value of what I offer and how it will affect the outcome of their choice, as opposed to if they internet or discount shop.
To date, I have netted an additional $9,839 for the month and still have one day left to add to that total. Oh and I didn’t lose one bride; they all chose to get their gown through my Salon.
“Thank you Bob. I’m walking in my value, and being paid for that value.”
Amy’s message is so important. Are you ever bullied into discounts or other concessions? Do you feel badly afterwards, as though you’ve operated out of fear or lack? If so, it might be a value question. And, the questioner is you. Sure, expect the other person to try and get as much as they can while giving you as little as they can. That’s just human nature.
But, the decision as to whether or not you’re going to play that game is totally up to you. Sure, you might lose an occasional sale. So what? You’ll more than make up for it. After all, just like with Amy, your prospective buyers will sense that you believe you have/give value. And, when that’s the case, they’ll want to do business with you directly, and refer you to others.
And, oh yes…Amy did indeed hit the $10,000 mark of additional net income for the month. And she has continued to do that consistently, month after month.
Indeed, serving more people, making more money, and feeling great about oneself proceeds from – as Amy would say – “walking in our value.”[Ed. Note. Bob Burg is coauthor of the International Bestseller, The Go-Giver. The book has been published in 21 languages and has sold over 250,000 copies. To download Chapter One, visit Burg.com.]