The Go Giver: Accepting payment for Value June 23, 2014 – Posted in: Sales
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I read the book The Go-Giver a few years ago and I really liked the message it had to offer. In fact, it’s probably one of the best books I have read on over-delivering and reaping the rewards of doing so. Although I think the book had some great points, I also have some serious issues with it.
But before we discuss the details let’s look at the five “Laws” in the book
1)The Law of Value: Your true worth is determined by how much more you give in value than you take in payment.
2)The Law of Compensation: Your income is determined by how many people you serve and how well you serve them.
3)The Law of Influence: Your influence is determined by how abundantly you place other people’s interests first.
4)The Law of Authenticity: The most valuable gift you have to offer is yourself.
5)The Law of Receptivity: The key to effective giving is to stay open to receiving.
Now I understand that all these laws are thought-provoking and interesting but I have a problem with the first law that our true worth is determined by how much more we give in value than we take in payment.
As business owners, the goal isn’t to provide much more value than our price point. This is just bad business. For example, I’m not going to sell you a brand new Ferrari for $20,000. This is madness and its throwing money down the toilet. No one will value what we do if we give things away free or severely discounted.
It might be a great way to start a small business and establish our reputation but I don’t think it’s the best strategy once we have built a sizeable business.
I often talk about coca-cola. Coca-cola doesn’t spend 100 dollars on making coke and selling it to you for 40 cents because this is obviously just bad business. The business should make money. Not waste it.
I don’t think was meant to be taken literally. And I do think that providing value is important for small unestablished businesses but it isn’t a good long term strategy for businesses that want to build into the future.
I think this premise really needs to be changed to “Provide great value and price your rates accordingly.”
The reason why we don’t want to over-deliver on a large scale is that we have no guarantee that our buyers will come back and we shouldn’t place ourselves in a bad situation by setting prices excessively low.
Business needs to make money and money is made by MAKING MONEY. We make money by finding advantages in the market, selling discounted products at higher prices, exploiting the sector, etc. It’s not pretty but its just reality and it’s how business works.
This is the only problem with the book because of its daydreaming in a world that doesn’t exist. The real world is filled with competition and canny businessmen who will do almost anything to win. We can not ignore this.
Another problem I have with the book is with The Second Law, The Law of Compensation which states “Your income is determined by how many people you serve and how well you serve them.”
I think this is incomplete. It should be changed to “Your income is determined by how many people you serve and how well you serve them and how wide your profit margins are.”
Again, the problem is in providing much more in value than we ask for in payment. This might be a great strategy for businesses who are just starting out and who need to find new customers but it isn’t a great strategy for large-scale businesses.
If we accept this premise, we may as well work for free and see where that gets us. Again, the success of our business depends on profits. Profits are the difference between what we spend on making a product and the price we sell it for. So how can we make a successful business if we provide more value when what we ask for?
Although it is possible to provide more value than the price point we sell it for by being strategic or groundbreaking in our sector. It is not a good idea in general for most businesses that must make money or die Giver.