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  • Bob Burg

“Business volume to our new targeted market increased by 300% in just 3 MONTHS! ”

~ Dave Brandt, Divisional Vice President, GE Financial Advisors, Genworth

Is There A Metric For Value?

December 27th, 2012 by Bob Burg

Is There A Metric For ValueIn a free-market based economy, money is simply an echo of the value that’s been provided. After all, why should anyone willingly give you their money unless they feel they are receiving value equal to or — even more preferably — greater than the money they are exchanging it for?

The key, as I posted recently on my Facebook page, is to focus on the giving of value…and allow the receiving. Remember, not only must we breathe out, we must also breathe in.

As part of an exchange with entrepreneur, Duane Adolph, he asked:

“I’ve been thinking about this for a while, as well. in order to aid ‘focus’ which ‘Metric’ would you use to measure Value Delivered? Income Statements and Balance sheets measure only echoes’.”

I responded: Duane, thank you for your question. 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 the company 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.

29 Responses to “Is There A Metric For Value?”
  1. Hi Bob!

    That’s a great way to look at money: each dollar bill is like a vote or the applause we give to those who served us.

    Now, I’m off to offer my audience an extraordinary amount of value while allowing myself to receive a standing ovation! :)

    Thanks for sharing this with us!

  2. Bob Burg said at 10:17 am on

    Bruno: I love how YOU said it: each dollar bill like …the applause we give to those who served us. Excellent! Make it a great presentation, my friend. As Zig always said, “Knock em’ alive!”

  3. Steve Boyett said at 12:52 pm on

    Bob,
    Reading your point about the metric for a “Go-Giver Company” made me feel like the guy in the new Sonic commercial where he keeps track of his mind-blowing experiences. Not necessarily a radical thought, but one that strikes to the core of the issue in such a powerful way that it will alter my thoughts on the subject for the future! Again, thanks for taking the time to share!

  4. Bob Burg said at 12:54 pm on

    Steve: The only way I can respond to that is “WOW – thank you for such a kind compliment!” Really appreciated!

  5. Eli Israel said at 1:02 pm on

    It’s shocking to me how often folks miss this simple truth. Thanks for reminding them, Bob.

  6. Bob Burg said at 1:04 pm on

    Eli: My pleasure. And, thank YOU!

  7. Doug Wagner said at 3:30 pm on

    Hey Bob, another great post. The echo of value is the revenue you receive makes sense as always.

    Of course whether you can make a profit depends on how much difference there is between what it costs to deliver the value and the amount you receive; and how well you can innovate around costs.

    Revenue is a lagging (rear view measure). Looking for some measures that help you predict the value you are generating might include: customer satisfaction, referrals, and activities you use to deliver value pre-sales (presentations, consultations, etc.).

    Any thoughts on others?

  8. When YOU Focus on GIVING You allow for the Receiving However, You also have to be OPEN to receiving… Meaning eliminate all of the OLD outdated mind viruses that say you don’t deserve… And the Value you give will either make You or break you if you will…
    We also need to know our Customers…
    Because Value like all things in life is up to the individual person’s perspective of what they deem is Valuable to them…
    Happy Holidays everyone…

  9. Bob Burg said at 11:38 pm on

    Doug: Thank you for your thoughts and comments. Regarding your second paragraph, indeed true; for the sake of the specific point of the post, however, I think we need to assume that there *is* that positive difference between cost of goods sold, etc. and amount received. Regarding your third paragraph, all true and an excellent topic as a post of its own. Thank you for sharing with us!

  10. Bob Burg said at 11:39 pm on

    Carly: Very true. It’s where it all begins, right? Thank you for sharing!

  11. Pete Evans said at 4:03 am on

    Bob,

    This is a great posting. So many businesses focus on the bottom line and don’t focus on giving value. There are many examples of businesses who have focused on short term gain, only to fail later on. The point about sustained profitability is one that businesses need to concentrate on. Revenue can often lag behind the value you give. If you are patient and remain true to your values, then the revenue will come.

  12. Bob Burg said at 9:10 am on

    Pete: Exactly. As you said, the focus needs to be on the giving of value. The revenues are simply the measurement of such. Thank you for sharing!

  13. Lene Jytte Hansen said at 11:47 am on

    Well I focus on the space it has occupied in my heart and how this value will be the first thing I think about if someone else in MY sourroundings need just that value – and I will NEVER have one schred of doubt in my mind to promote this value to my connection or friend!!!!
    Money is not my messure – money is often the “easy way out” – dont’ get me wrong LOVE having money as it provides freedom to act – this is not what I’m talking about here!!! If money should be the messure of what I think of the service you deliver or give to others – nothing could be further from the truth!!!!!! Look at a Book you can download for free “As a Man Thinketh” by James Allen. It’s free, but yet one of the greatest treasures you can have! And you one of the greatest teahers, coach or mentors you can get. I think you will also recognize it by the ones following you no matter if they can proffit from it themselves or they just put you up front no matter what! Truth is SO beautiful and simple and therefore easily recognized!
    Hugs and LOVE
    Lene

  14. Bill Lynch said at 1:48 pm on

    Bob,
    I posted this on my company page asking customers to tell me how they measure our value. Another thought provoking post. As always, I appreciate you.

    Bill

  15. Bob Burg said at 3:15 pm on

    Lene: I think the “evil money meme” that our friend, Randy Gage often talks about has you perhaps looking at this a bit differently than the way it was intended. Sure, some things of great value can be had for free. But, two points here: When James Allen wrote that book, he sold it, and he made a LOT of money from it because the value he provided in the book was exceptional and he touched the lives of many with it (Remember Law #2 from The Go-Giver: Your income is determined by how many people you serve, and how well you serve them.). Even, today, many of the people who make his book available for free online (because 75-year copyright conditions ran out on it) use it as a lead-generator, selling additional services for a lot more money.

    I respectfully hold to the premise of the post that – in business – while the FOCUS should be on providing value, the MEASUREMENT of such value is the money received for it.

  16. Bob Burg said at 3:19 pm on

    Bill: Thank you. I love to hear that. Please let us know the responses!

  17. Lene Jytte Hansen said at 3:51 pm on

    You are propably right Bob! I know you have to be as you are the one successful moneywice – not me!!!!!!!! LOL But I also think there is some truth in my viewpoint :)

  18. Bob Burg said at 4:28 pm on

    Lene: Let’s not let it go quite yet. I want to make sure we are seeing this from the same foundation or premise. That way we’ll know we are not discussing two different things while thinking we are discussing the same.

    My point was that – in business – by focusing on providing value to others (and providing them what THEY consider to be of value), you will receive money as a result. Assuming that, as Doug alluded to earlier, your revenue is greater than your costs, you will make a profit.

    What are you saying that is different from that? Remember, James Allen profited greatly from his book. He did not give it away for free, and while I’m sure he loved the fact that he greatly touched peoples’ lives with the great value he provided (that was his focus), the measurement of the immense amount of value he provided was an immense amount of money. Does that not make sense?

    Remember, money is simply the “measurement” of the value. It’s a reflection of value. It is nothing more or nothing less than that. Of course, in other areas of life, money is not the measurement of value. In business, it is. Here is a link on Wikipedia I just found that might be helpful. http://en.wikipedia.org/wiki/Store_of_value

  19. Lene Jytte Hansen said at 5:01 pm on

    It’s true Bob, that at some point, in business you will or should be able to recieve money for the value you have been delivering!!!!!!! Definately!!!
    Actually what I’m trying to point out, is that I’ve often heard, that if they had known what the value delivered was – they would NEVER have paid so and so much. But they did anyway, because they thought…… And then the income might look like a lot of value were delivered, but in fact not! Can you follow me?
    And thank’s for the definition Bob! You are AWESOME :)

  20. Bob Burg said at 7:25 pm on

    Lene: If a company delivers less than what they promise, and they do that consistently, they will soon be out of business…..as they should be. (Or, at the very least, making a lot less money than if they were delivering what they promised)

  21. Bob Burg said at 7:26 pm on

    And, YOU are awesome, my friend!

  22. Lana said at 1:46 am on

    This is exactly what I love about capitalism, healthy business practices & fulfillment in delivering a great/unique/sound product or service. Because owners take pride in what they deliver (have vested interest, ie. joy in satisfying customers, joy in producing something of value, joy that their name is attached to something of value, the thrill of making something succeed or disproving naysayers, etc.). This is why it’s worth fighting socialism/communism where the exact opposite happens. You’ve just reinforced my conviction in the evils of socialism & the unction to fight hard against it’s chokehold that is beginning to take over our great country.

  23. Bob Burg said at 9:24 am on

    Lana: Thank you. What a great compliment. Indeed, what you describe is the essence of Free-Market Capitalism and why/how it benefits all who live in that type of society. This is the opposite of socialism/communism where, for all to see, the standard of living is so much lower, often desparate. Thank you for sharing with us!

  24. Scott said at 10:03 pm on

    Great post. It is very simple.
    If you focus on the needs of your customers the business (bottom line) numbers happen.

  25. Bob Burg said at 11:32 pm on

    Scott: Very well-said, my friend!

  26. Great post, Bob! I have never thanked you for this, but your books The Go-Giver and (especially) Go-Givers Sell More really helped transform the way I think about selling and business in general.

    Due to a bad early selling experience, I was hesitant to jump into sales for my company. But your books helped me realize that selling is about providing value to people, not manipulating in any way. This blog post just strengthens that point even more.

    Thanks again!

  27. Bob Burg said at 8:27 pm on

    Josh: Thank YOU. What a kind and terrific comment. Means a LOT to me. Very appreciated!!

  28. Duane Adolph said at 6:49 pm on

    Hi Bob, Happy New Year!

    THANKS for sharing our Facebook exchange. I see your post has sparked, some thought provoking discussion and posts here in the comment section.

    Your point about the “lapse” between value delivered and the resulting monies not being on the same day deserves its own post. VERY important for a business survival IMHO :->

    Thanks for sharing your words of wisdom with us Bob! I now have this quote posted above my desk:

    [What is Money?..."Money is simply an ECHO of the value that’s been provided. (Bob Burg)"]

    Time for me to go MAKE SOME NOISE in the market place so I can hear those ECHO’S :->

    Thanks Again BOB!

  29. Bob Burg said at 8:17 pm on

    Duane: You’re awesome, my friend. Thank you so much for being the inspiration for the post, and for the wisdom you shared!

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