Posted in practice
on February 24, 2014 4:26 pm EST
Communicating Value: A Panacea for Your Business’s Success
Last September, this column set off to explore the third stage of the business financial cycle: value capture. In a holistic view, capturing value (aka, getting paid) follows value creation and value communication. Cash flow is the lifeblood of your business, so it’s easy for value capture (getting paid) to take center stage. But in a holistic view, revenue “generation” follows the creation and communication of value. “Generation” is in quotes because it’s used so often, but is really a misnomer. The only people who generate revenue out of nothing are con artists. The rest of us who work for a living have to generate a product or service of value, to communicate its existence and utility to those who might be willing to pay us for it, and then to agree with potential customers on price and delivery terms. The last part is no less important than the first two, but it’s not “making” money.
Service professionals, including designers, are always, in some way, shape or form, selling themselves. Like it or not, personal selling is, well, personal. People like to work with people they like.
Although selling typically involves lots of communication, it is not the same as communicating value. To sell your home, you must accept the price offered by a willing buyer. Before that happens, your broker lists the home for sale. The listing price is a best guess about the home’s value, based on location, condition, size and design, expectations about what the price will be a few years on, among other factors. Effective value communication locates your product or service in a “neighborhood” that reflects both the value you create and what you expect to capture. With a home sale, if you’re in the right neighborhood and your value proposition is believable, you will get showings and eventually offers. Effective value communication (aka, marketing) will bring interested clients to your door.Economies of sale
Marketing is general; selling is personal. Some people have a talent for making deals, yet many have difficulties—including most of those who are very good at creating value. The previous column on this topic discussed the rewards and risks of delegating sales. Even if you can afford to hire a sales professional, you are going to have to persuade other people to entertain your point of view: you may even have to persuade them to see your point of view about the price of a specific project. In our business culture, it’s really impossible to avoid selling.