Maximizing Value in Your Business


Try not to become a man of success, but rather try to become a man of value. – Albert Einstein

Typically, there are three main pillars to maximizing value in your business: revenue, cash flow, and shareholder wealth. We’re not going to cover any of these. Instead, we’re going to show you how investing in the customer experience will subsequently add value to your business. We’ll also show you how “giving” is the new “taking”, leading to a natural increase to the three main pillars. First, let’s quickly take a look at a couple of definitions of the word value:

1. the regard that something is held to deserve; the importance, worth, or usefulness of something

This might mean, “Your business is of great value to me, because it allows me to get my shipping out on time.” In this example, the value might be innate to time savings or convenience.

Another example using this definition might be, “She is of great value to the company, because of her ability to cut costs.” In this instance, value may be more intrinsic to profitability.

Another definition of value takes a different approach:

2. a person’s principles or standards of behavior; one’s judgment of what is important in life

For example, “We pride ourselves on our values like integrity and honesty. This is why our customers love us.” When you use value in this manner, it embodies more of an ethic or moral standard.

So which definition am I suggesting you maximize for your business? The answer is “both”. I’m talking about the value of your business in the eyes of your customers, as well as the values associated internally with your business, both financially and in principle. I’m referring to shareholder wealth, brand perception, and everything in between. It’s my belief that they can work synchronously and in harmony with one another if your interests are in the right place, namely: customers first, customers always. If you can add value to your customers on a consistent and reliable basis, the financial gains will come, as will the gains in value of your business. Your intrinsic motivations (such as value extraction) shouldn’t come at the expense of your extrinsic motivations (like value creation), because there are broader influences that determine long-term success.



Value Extraction

Value extraction is a model that identifies and captures maximum potential from prospects, existing customers, technology, and employees. In terms of what I want to focus on, I am referring to the maximum dollar amount you can extract from your pool of potential customers through your value proposition(s), and also the maximum “load” you can leverage from systems within your business. If you haven’t yet taken my free course on Business Model Design, I recommend taking it at some point during your business creation (the earlier, the better). In it, we cover the concept of value propositions pretty extensively, especially in regards to how they work throughout your entire business. I won’t harp on it too much here, but the takeaway is that your value proposition is the offer of value through which your customers gain some sort of perceived benefit. Maybe it’s better customer service or faster technology. The benefit is what the customer ultimately pays for, not the product or service itself. Maximizing the perceived benefits of your value proposition will ensure higher engagement from your target audience, leading to maximum profitability in your business.

Customer Lifetime Value

In business school, they teach you that one of the keys to success in business is through maximizing customer lifetime value (CLV). CLV is defined as:

A prediction of the net profit attributed to the entire future relationship with a customer- Wikipedia 

It’s an important metric in determining what it’s worth to acquire a new customer, meaning that if your customer is predicted to spend $1,000 over the entire course of their relationship with your business, you could spend up to that amount without losing money, even if your first sale was only $200. One of the most famous examples that illustrates this point is with the advent of the disposable razor head. Gillette knew that they could lose money on the sale of the razor itself, because a customer would likely spend far more money on disposable blades over the course of their lifetime. They effectively created a model that would maximize the value from each of their customers over the lifetime of the relationship.

There are many models that will help businesses predict what the CLV will be and how to extract that maximum value from each customer to be successful. There are also many methods, such as cross-selling and upselling, that help business actively seek value extraction. While these are all important factors in increasing revenue and something I may cover in future posts, I won’t go over them now because there is a larger matter that I want you to take away. That matter is the concept of intangibles, which I will cover next in Value Creation.

Technology & Systems

Technology and systems are other ways through which we can extract value, because they allow us to increase our output without increasing our input. If you were able to systemize your work such that your effort was reduced half while still being able to generate the same results, wouldn’t you do it? Your efficiency will have doubled, and your value will have increased, because you are now able to focus on other areas of your business. In many cases we can increase our output, while actually decreasing our input. It is this concept in system creation that will ultimately allow you to scale your business. Think about how much technology aids us in that regard. A four-page calculus problem that may have taken days to complete by hand, can now be solved in less than a second with a calculator. Similarly, what used to take businesses days to complete with regard to social media, can now be done in minutes.

I encourage developing systems that will ultimately allow you to do less of the work that provides no intrinsic value to your customers so that you can work on areas of your business that will ultimately push it forward. If you have a service business that requires you to invoice customers and you hate invoicing, create or utilize an existing system that will automate the process for you so that you can get back to the work you are actually passionate about. The work that you are now able to do will offer far more value than invoicing ever could. Understand that the more you are able to focus on the things you enjoy in your business, the more valuable you and your business will be.



Value Creation

Value creation is a model that generates value in the eyes of your customers beyond the physical sale of your product or service, and should continue to grow over time. In terms of what we want to focus on, we are referring to a broader theme of providing solutions for customers’ perceived needs, while simultaneously adding some additional benefit to their lives. To understand this concept better, we must understand what drives value.

Value drivers are activities or areas of focus that enhance value in the eyes of the consumers, thereby creating value for the company offering the product or service. These drivers could be technology related, convenience, reliability, customer service, or other benefit. It’s important to note that while some value drivers, like technology, have physical connotation, ALL value drivers lead to intangible benefits in the eyes of the consumer AND in your business.

I define intangibles as the abstract principles associated with creating value for your customer, such as trust, customer referrals, brand loyalty, etc. By this I mean that spending time or money to acquire a customer does not necessarily have to reflect a direct monetary gain for it to be effective. The purpose of these intangibles is adopting a long-term vision for your business so that you can properly align resources for its growth. Intangible benefits are often denoted by indirect benefits and the link between these indirect benefits and value creation is made through effective strategy and goal creation.

Value creation should be the first priority for all entrepreneurs, because it sets the tone for your business and prevents short-sighted rewards from influencing long-term decisions. It’s the nucleus of your entire business. If your customers value impeccable quality and beautiful design, then the skills and processes to produce such products are of high value to your business. You wouldn’t risk your reputation on creating mediocre products with mediocre parts, just to save money in the short run. However, if your customers value price, spending time and money on highly-involved processes might not be the best idea if it’s going to drive your costs up. The idea is that your value proposition is a proposition to the target customer, not your business, meaning that you should have a customer-centric focus from the beginning. If you can adopt this attitude and practice from the onset, your business has a much higher chance of being successful.



Value Maximization

Maximizing value is a rather simple concept: create and DELIVER value to your audience on a consistent basis and in turn you will be creating value for yourself and your business. As you build additional value in your business, invest the proceeds into creating MORE value for your audience, and so on. The process should be cyclical:

Value Chain


Albeit an easy concept, maximizing value is not always as easy to deliver as it is to conceptualize. This is especially true when your business has yet to make any money and you’re wondering “ should I keep going?” Sometimes it takes months to start capturing value from your consumers. Maybe it comes in the form of your first email subscriber or maybe it’s a comment on your blog. Whatever it is, use it as motivation to CONTINUE TO BUILD VALUE. Remember that business should be like dating, not marriage. You wouldn’t expect someone to pop the big question on the first date. Likewise, your audience doesn’t want to you pay you $1,000 on day one without getting to know you a little bit.

Think about when you first start a blog about a particular niche, say sports. When you publish your first post, chances are you don’t have a lot of credibility in the industry, especially compared to someone who has been doing it for a long time. BUT, if you continue to add value on a consistent and predictable basis, your credibility continues to build, as does your value. Pretty soon, your audience starts to trust you and the money starts rolling in – as an aftereffect. Remember that the money will always follow value, because value stems from passion. And you probably know by now my attitude toward living your passions. If you plan on doing it just for the money and can’t add some sort of real value, you may want to rethink your strategy because like you, your customers are also seeking the best – you guessed it – VALUE.

OK, if you’re anything like me, you do like money, and would inevitably like to see it become an aftereffect from building value. And let’s be honest, you wouldn’t go into business if you didn’t think it would someday make money. The whole point of my framework is to help you MONETIZE your passions. So how does money fit into the equation? Well, the answer is, “in the exact same way.” Just like continuing to reinvest your time and energy into building value for your audience, you should reinvest money into your business in a way that will harness continued value for future business. Remember, it too should be cyclical.

Money Value Chain


It may seem counterintuitive, but the more you can GIVE to your business to add value — in time, energy. and money — the more you will GET in return. Maybe not right away, but your net return will almost always be higher when you give instead of take. For example, imagine you currently have four customers who pay for your consulting service at $1,500/mo. Now say you later came up with a marketing report on their industry and think you could probably “upsell” it to your customers for additional money – so you make an extra $150 each or $600 total. BUT, what if instead of taking $150 from them, you GAVE them that report instead? Before you call me crazy, what if I told you that your chances of getting a referral client just skyrocketed because you went above and beyond by continuing to build value for your customer? And instead of making $600, perhaps your referral just landed you an additional $1,500 contract… per MONTH. That’s way better than a one-time gain of $600.

The same goes for investing and reinvesting in your business financially. Let’s say you run ad campaigns that drive a 50% return on your money. So if you invested $5,000, you get $7,500 in return, or a net gain of $2,500. Not a bad pay day. Well, if you decide to take the money you earn and invest in a fancy computer for the office, it would probably make you pretty happy. Still not a bad day. BUT, if you re-invested that money into your system instead (which you already knows gives you a 50% return on your money), you could turn that $2,500 into $3,750. And that $3,750 into $5,625. And so on. When you reinvest into building value into your business, your money actually makes money. And your value creates more value. We’ve all heard the saying, “A bird in the hand is worth two in the bush.” Likewise, that money is more valuable when it’s used to make more money. That’s what maximizing value is all about.

The key takeaway here is that money shouldn’t be your value driver, it’s just a vehicle to and and aftereffect from building real value for your audience. The harsh truth is that if you aren’t willing to build value for others, they won’t be willing to add value to you. But, if you can take a customer-centric approach to everything you do in your business, the money will come in no time. When you’re looking to maximize value in your business (or in life), just remember:

Customer (or others) first… Customer (or others) always.
Money follows… Value in all ways.

Thank you for taking the time to read my post. As always, feel free to contact me at with any questions. If you want help finding your purpose, I can help you align your passions with your skills and find strategic ways to monetize them. I encourage you to keep the discussion going below and if you liked the post, please share it with those who you think might like it as well.