The one piece of advice i’d give to any aspiring entrepreneur is to understand the significance of value. Both inside and outside of work.
Value is when something has perceived importance, usefulness or monetary worth. It’s also what we give out in our actions, behaviours and the choices we’re seen to make.
Practically, as a marketer I give value to everything. Whether it be Clients, Brand Advocates, customers or digital and experiential activity. I crunch the numbers on web-traffic, engagement and shopping cart abandonment to predict EXACTLY how much my we’ll make with each penny we’d spend… anything more is a bonus, but it is never less.
I am not a mathematician, but I do understand that conversion rates on past activity give me a scalable indicator for any repeated action. Every referrer is ranked from 1 – 100, every Brand Advocate that mentions us on youtube is paid on my prediction for ROI, in fair tiers upfront.
The price is what they want you to pay, not what it’s worth.
Think hard about that next time you buy up email data for example. They want £5,000 for 5,000 email addresses. Sounds fair, but what’s their open rate? Let’s say the average is 8%. Now that’s 400 customers who will see those emails, not 5,000. So where you were paying £1 per email address, now you’re paying £12.50 per email address.
If they value their list at £1 per customer, the most i’d be willing to pay them for that list is £400. Honestly, that’s its value. They’d negotiate up from there, i’d look at my conversion for my website and i’d work out how much i’d stand to make from those customers over 6 months on my average order value as an example. I’d settle to pay slightly more, only if I’d calculated my potential return, but I would never pay list price for that.
This is also true for your interactions. High value people and clients deserve more of my time. I work this out with Pareto’s law. Which 20% of people will bring me 80% of hapiness, support or opportunities. Cut low value interactions out of your life and business. They only serve to take up 80% of your time and patience for 20% of the reward.
Know what your ideas are worth, never work for someone who doesn’t value you, and predict/forecast your ROI for ANY activity by being unapologetically analytical.