I realized recently that creating value for clients is really the only way to be successful long-term.
This might seem like an obvious conclusion, but I don’t think it is sufficiently emphasized. Obviously people talk about creating value but I think the point that bears repeating is that if you don’t create sufficient value: you will never be successful.
Long-term, you’ll fail to retain clients or attract new ones because they will realize that you aren’t providing them with a positive return. Whereas if you are generating enough value, your clients will see the returns they are making and will come back and tell their friends.
So I think it’s important to focus on value above all else.
And, of course, value basically means benefits minus costs. It doesn’t always mean having the highest quality, simply that the benefits or returns that you can offer are lower than your prices. If you can do something adequately at a very low price, that’s valuable.
I think with straightforward, commodity-like services, it’s easy to see the connection between value and success. Graphic designers trade their skills and time for direct payment. The amount they get paid is relatively stable from designer to designer, and if they work more, they then get paid more.
So what if you do want to get paid more?
You have to become more valuable. And that’s a very tricky thing to do.
If you can find a way to scale your services while retaining quality and maintaining low prices, then you can multiply the value you can provide.
Of course there are near-endless ways to increase value, but if you plan on simply trading your commoditized services for payment all alone, you are basically limited to just how many hours you can put towards it, which obviously has a cap.
You could become the very best in your field. If you’re fortunate enough to have that as a legitimate option, it works!
Or of course you could specialize or find a way to combine multiple disciplines, fields, or industries in some way to provide additional value to people in a niche and charge premium prices for those services.
However, I would personally rather choose to focus on a few services that I can do really well, build up the infrastructure and processes to scale those services, and then build a team as I grow to keep it running.
In a dream world, my business would be a well-oiled machine that basically runs itself with little input from me. If I can provide great value to clients and scale it, I can continue being successful.
I really need to think, then, about how I can provide the most value to clients, particularly in the managed hosting space which is where I think we currently do the best job and where I can best scale the business.
Another random thought: I initially wanted to suggest here that value is relative, but I decided that it actually isn’t. The services you provide have absolute value. Either they can make your clients more money than they cost, or they can’t. With some services, the ROI might be very difficult to calculate because it is very indirect to their revenue, but ultimately there is still an absolute value associated with it. And it is worth it for your clients to work with you if you have good value.
With that being said, you might be in an industry where there are others with much greater value than yourself, which makes them more competitive. But I would argue that, long-term, being competitive is way less relevant than being valuable. In an industry where everybody is valuable, prices are bound to go up. If you were valuable at low prices, you’ll get business. If you’re valuable at high prices, you’ll get business. Nothing else really matters.