Does Your Assessment of Your Business's Value Match Up With Reality?
While my family and I love our community in rural Maine, my work as a professional speaker necessitates living closer to an international airport, so we made the decision to move closer to Portland this summer. The keyword being decision, as we decided to put our house on the market but haven't sold it yet.
It's been on the market a couple of months and its listing has received a ton of hits but we haven't seen a lot of activity or offers. There's a hidden mistake that we were making, which is a great reminder for entrepreneurs in every industry.
At the end of each month our realtor sends us a report with metrics on the number of website page views and showings the house has received. In short, there wasn't a strong correlation between the page views and showings and offers. Disappointing? Yes, but even more informative because the numbers and the market never lie -- not in the real-estate market and not in your industry either.
It's a great lesson: The market will tell you if you are in demand or not. The challenge for entrepreneurs is that we all have our own internal appraisal of the value of our products or services. Then there's the actual market value. There's usually a gap between the two.
Our self-appraisal of the house's appearance and value was based on memories and emotion. The realtor made some suggestions regarding staging our home to add value and make the place more attractive to potential buyers. They were simple and sensible but we overlooked the fixes because we've been so accustomed to living in our house exactly the way it was. In essence, this is why our self-appraisal didn't match up with what the market was telling us.
I often see memory and emotion drive my clients' self-appraisals of their value in their respective markets. There's the sweat equity you put into a product launch, the legacy of the company and the emotional investment you put into bringing new services to life.
Is there a gap between your self-appraisal and the actual market value of what you have to offer? It's a common trap in business because it's hard to see the picture when you're trapped inside the frame. Is there an unbiased third party showing you hidden blind spots and providing you with feedback on your attractiveness to the market? If not, it's time to recruit one.
This long, hard look our broker made us take regarding curb appeal and market value of our home caused me to reflect how the same thing applies to business. Like the report we receive from our realtor, I assess my value in the market monthly and recommend you do the same.
What is the market telling you? Specifically, what's causing your prospects to rule you out vs. prompting them to take a closer look at all you have to offer? Does your marketing and web presence convert into appointments or are they ruling you out? Does the value demonstrated in the appointment convert into an offer or sale?
You treasure what you measure.
I believe everyone should be conducting a market-value assessment of their businesses. At the end of each month we measure:
- Number of inbound inquiries
- Number of appointments or sales calls made
- Number of presentations, networking events or other strategies that showcase your brand
- Number of marketing strategies you've used, both online and offline (In my Game Changer Selling System we recommend employing a minimum of 20 at one time.)
- Total prospects in your pipeline
- Number of prospects on the fence and haven't made a decision yet and the odds of closing them
- Actual sales vs. monthly sales goal
Remember, the market never lies. The numbers in your business will usually tell you everything you need to know. In the eyes of the market, is what you have to offer attractive enough? If inbound inquires and referrals are low, it speaks to your attractiveness and the value you offer.
Does your appraisal match the markets? If it doesn't, this begs the question: How big is the gap between your self-appraisal and your true market value? Figure this out and go to work on bridging that gap. (When there's a gap it's almost always that our self-appraisal winds up being higher than the market value.)
If you want to increase your value to the market, you must dramatically increase the value you provide your existing clients. Give them exponentially more value to the point where they practically feel like they're getting one over on you.
Here are five points of value enhancement:
- Content: Are your marketing collateral and intellectual property superior?
- Delivery: Examine each customer touch point. Are they mind-blowing, transformational experiences?
- Positioning and unique selling proposition: In other words, are you well differentiated from the competition and is your position in the market crystal clear?
- Curb appeal: Are your products and services packaged in an attractive, convenient way to attract and retain clients?
- Network: Your network is your net worth. Are your relationships strong enough to ensure quality and quantity of referrals?
When you go to work at enhancing these areas, you increase your market value. The more value you add, the more the market rewards you.
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