In order to stay in business, you need to be able to profit from the value that you are creating. If you don’t, then you can’t survive in business for very long.
Are you delivering enough value to your customers that you are profiting from it? Is it a big enough profit to make it worth your while to stay in business for the long haul? Or are you slaving away for a low profit margin, and feeling like you are trapped with a business that is just scraping by?
Do you fully understand how you are providing value? Do you really understand what it is that your customers are paying for? Are they paying for the products and services directly? Or is there a 3rd party footing the bill? Or are they paying for something else entirely outside the product or service that you are actually selling?
How Does Your Business Deliver Value?
I found an interesting article talking about delivering value to your customers. In it Greg makes some interesting points like the following:
While creating and delivering value are essential, it will all come to naught if you are unable to profit from it. In some businesses, such as retail, this is clear and straightforward, but in others the waters are considerably more murky.
Bars and pubs, for example, create and deliver value through offering a good atmosphere, live music and friendly, efficient staff. However, they often don’t charge for those things, but rather earn money from the mark-up on drinks.
Nowhere is this dilemma clearer than in the media business. For decades, very few publishers have been able to capture value by charging consumers for access. Largely it is advertisers who pay the freight. The New York Times, for example, has gained some revenues through their paywall, but lost it back in the form of falling ad sales.
In his book Free, former Wired editor Chris Anderson, pointed out that as more products become digital and marginal costs fall to zero, it becomes harder to earn money by charging directly for products and services. Obviously, business models have to adapt.
You can see the Greg’s whole post here.
I’m sure that your business knows how to deliver value, but are you profiting from it accordingly?
Is there a small (or large) tweak that you could make in your business and you processes that will increase the value and your profit margins?
Do you have some work to do to fully profit from the value you are providing?
Post a comment below to let me know, and please Like my post so your friends can benefit too.
Have A Prosperous Day!