Value Value Everywhere! But do we really know what it means!

A practical guide to understand and use the concept of value

Introduction:

In the world of business we hear this everywhere. Create value! When we hear this, we agree with the statement, but only have an intuitive understanding of the term Value! We often fail to define this term in a practical and concrete way in relation to our products/services. That will be the exact purpose of this email.

This email has 1630 Words and would take about 6.5 Minutes of your time! There’s a bonus waiting for you at the end, if you plough through the rest of the content!

Concept of Value

Value is a concept that we use in the context of an exchange. It is said that for two parties to exchange something each must have what the other values. Let's see some examples.

You turn in your work for a client. The client pays you. The client has placed more value on the work you have produced than on money in her bank account. You have placed more value on money than the work you have produced. You created value for your client and yourself.

You purchased a book. You valued the knowledge/entertainment that book gave you than the money in your pocket. The author of the book has created value for herself and you.

By reading this piece you are giving me your attention and time. I am giving you knowledge. I value your attention and you value this knowledge. We have created value for each other.

Key Points to Note

There are some aspects that aren't so obvious in the above examples. I am outlining them so that we can deepen our thinking about the concept of Value.

#1. We value things that we want but cannot produce for ourselves.

The client wants your work. You want knowledge that the book has, I want your attention and focus. In each of these cases there is something someone wants but cannot produce it for themselves.

#2. We place a value on things that we regularly put to use.

What we buy/get and don't use will stop being valuable. Think about the book you have purchased but not read. What value did it serve? Won't you think twice before purchasing another book? If not, then shouldn't you think about why you are purchasing books that you don't read?

Thinking point: If you simply read this piece and don't put it to use, what value will this newsletter be for you?

#3. Value has a shelf-life.

Your client wont derive value out of your work forever. You wont keep reading the book forever. You wont give me your attention forever.

#4. Value is produced through skilled effort. Higher the skill, higher the value.

You put in effort to produce the work your client wanted. The author of the book put in effort to write the book and share her knowledge. I put in efforts to create this piece and make it interesting to you. The more skilled we get at this, the more is the value we can offer.

Thinking point: Are your skills sharp enough to create higher value for your consumers and yourself? Robin Sharma says "To double your income, triple your investment in sharpening your skills." Does this sentence make any sense?

How to use this knowledge!

The knowledge of the underlying value of a product/service can allow us to develop the initial Value Proposition which will project what we can give to our clients/customers.

If you are an entrepreneur, then think about the "value" of your product to the consumer. Specifically ask:

• What is it that your consumer wants but cannot produce on their own?

• Will my consumer regularly put the product/service to use? What can I do to facilitate that?

• What is the shelf-life of the value? How long will the consumer value my product/service?

• What skills do you want to acquire or sharpen in order to create better value for your consumers and yourself

Use Case

Mr. Narada approached me a few weeks back asking me to help generate leads for his business. He said that if I gave him a lead he would be in a position to convert the lead into a customer. So, here is how I put the above questions to use:

Question: What is it that Mr. Narada wants but cannot produce on their own?

Answer: He wants the email id and telephone number of a person to whom he can pitch his product/service, have a conversation and convince them to purchase it.

Question: Will Mr. Narada regularly put my service to use? What can I do to facilitate such use?

Answer: Yes. If I develop a system through which I can generate and share a dataset of email id and telephone numbers of people who are interested to have conversations with him about his product/service then he will put it to use regularly. He has a sales team that works for this.

I also inquired if that team needed any training. Also, I wanted to make sure that any feedback regarding the quality of the leads comes back to me so that I can see whether the leads are working or not. This is an essential step because it helps me to keep generating value over a prolonged period of time.

Question: What is the shelf-life of a lead? How long can this project go on?

Answer: In Mr. Narada's case I estimated that he might require about 3 calls to get an outcome (either purchase/refusal). The calls must be spaced over a week. So, the shelf-life of each lead is one week.

Depending on Mr. Narada's team size, it would be possible to estimate how many leads would keep the team working for a week or a month or a year! This project can go on as long as I am producing leads that convert.

Question: What skills do I need to produce a lead that converts.

Answer: I need to know where the audience are? - I have to figure this out. I can do this with some effort.

I need to know how to get an entry into those spaces? - I have an active social media presence in several platforms. Getting an entry may not be issue.

I need to know how to initiate a conversation with them and get them to give me their email ids - This I know very well.

So, here is an outline for my over all Value Proposition to my client

• I will generate X number of leads per week. (I can outline my sources and my process if the client needs proof.)

• Your team will contact them and put in the required effort for conversion. The team shall fill a form that records the outcomes and some remarks. I will provide this form.

• The form will be shared with me week on week so that I can analyze the outcomes and see where improvements are needed.

• Before your team starts, I would want to look at the sales pitch and the scripts that they are using. In case these aren't being used, then I can help develop them at an additional cost.

• I can modify the sales pitch and scripts based on the weekly feedback shared with me.

• I can also help to train your sales team from time to time in effectiveness of converting the leads. This is also at an additional cost.

Next Steps

I have applied these questions to a service. You can apply the same question for a product as well. Explore the same question and try to answer them from a product's perspective. You can share your results with me as reply to this email.

Did you like this newsletter? Please let me know your feedback. If you know a friend who can benefit from this newsletter, share it with them!

Do you have a topic which you would like to explore in more detail? Reply to this email with the topic and I shall consider that in my future emails.

I think that's enough work for one week. Go ahead and click on the reply button and let's begin a conversation!

Book of the week

I plan to read 52 books this year. Roughly 1 book each week. I have a varied taste for books and I read fiction, science fiction, historical fiction, non-fiction, mythology, mystery, thrillers, poetry etc., I thought it would add value if I had a section where I can share my notes in a concise form. So here is this week's book:

This week I completed reading The Subprime Attention Crisis by Tim Hwang. The main proposition of this book is that the value of online advertising is highly inflated and hyped. The reasons are

• The annoyance of users about ads. This is indicated by the increased use of Ad Blockers across the world.

• The placement of ads through programmatic bidding (in places which may be seen by a user) and

• The click fraud that generates spurious results

These have eroded the value of online advertisements. But, ad agencies and publishing platforms have been hyping up the value by masking data and promoting advertising.

Tim Hwang, thinks that this bubble is up for bursting anytime. According to him, we are sitting on a time bomb. The ripple effects can cause a crisis which is on par with the Subprime Crisis of 2008. One of the dangers of this is that advertising actually makes many of these platforms free for use and if they collapse then it is going to

I liked the book because Tim also proposes a set of solutions.

• He says that, setting up of a regulatory body that promotes independent research into the effectiveness of advertising is an immediate step that can project the actual value of online advertising.

• Also, he encourages exploring business models that are not dependent on advertising so that the Internet can still remain free for use while generating revenue for the respective organization.

You can purchase the book here

You can see a good interview of Tim Hwang on the book here

That’s all for this week folks! See you in your inboxes in the next week!