The “add value first” approach

Business is all about momentum. If you can get in the mindset to “add value first” to gain your following and build your brand you will be a lot better off.

Sacrifice profits in the near term by discounting your service or products with the goal of gaining a following and securing value later.

In “offline” industries you see self storage facilities give the first month free. You see subscriptions like Netflix give away a free trial period. You might see a home services company give away a free service at first in the hopes of gaining a long term client.

I have a friend who owns a wealth management company. He makes his living by advising really rich people on how to minimize taxes and manage their assets/companies. He goes into every sales meeting with prospective clients with the goal to give away as much information and add as much value as humanly possible. All the advice he would usually charge for he gives away off the bat. I asked him one day if he ever worries about people taking notes and going to their accountant and doing it all themselves.

He said sure that is a risk but what ends up happening is that I differentiate myself from my competitors and gain instant trust with the potential client. Most of the time we bring on the client on the spot and if not they usually come back six months later when they need more advice and we start our relationship then.

This can be applicable to so many industries. Amazon is still playing the long game and adding value while sacrificing profits. Dave Ramsey built an empire giving away consulting on public radio.

There is always that fear, especially in small young companies, that you really have to capitalize on each early sale to validate your model or feed your family. So you try milking everything out of the client or customer up front. You can differentiate yourself by thinking differently here.

Give away your first service. Invest some time in showing off what you can do to get future clients. Charge a low price at first to get volume and learn the business.

Delayed gratification is the key to success. The marshmallow test. Amazon still hasn’t eaten the marshmallow.

December 12, 2018 7:39 am