How often in life does a person or business leave you feeling as though you got the better end of the deal? The reality is not very often. Lots of companies and people fail to create a value surplus where you [as the customer or recipient] got more out than you invested in.
ROI positive people and businesses think and do differently.
They intentionally figure out how to create a value surplus because they know it’s the catalyst for more growth, more opportunities, and a more fulfilling life. A value surplus in business allows you to grow and potentially hire more people.
As an employee, a value surplus ensures upward mobility and career growth, not to mention a higher degree of job satisfaction.
And in these Covid-19 times where we’re teetering on the edge of recession, your ability to create a value surplus and become an ROI positive person is even more critical.
So if you’re interested in becoming a recession-proof, ROI positive person, keep reading. Along with examples, I’m going to share how you can create a value surplus.
As a business owner, this information will help you build a team of A-players.
As an employee, you’ll discover how to use the concept of value surplus to boost your career and get the promotions and positions you want.
As a human, you’ll discover how you can make more impact and feel more fulfilled.
Why you MUST create a value surplus
When was the last time you paid for something begrudgingly? Here are some common examples:
- Airline change fees
- Expensive parking
- A bottle of water at the airport ($$
- Gym signup fees
How did you feel towards the brand, person, or organization when you paid that money?
Chances are you felt instant buyer’s remorse. You may have felt anger or frustration too - especially if you thought the company took advantage of you because you had no other purchasing option at that time.
Even if the investment was just $10, the feeling of a negative surplus leaves a bad taste in your mouth.
So how do we do it differently?
Here are some examples of two similar products that are on opposite ends of the value surplus spectrum.
After all the fees are added in, cable adds up to around $100+ a month. For that price tag, you get a company that’s a pain to deal with, hard to cancel (you have to actually speak to someone on the phone 😩) and you pay a lot more for the privilege! In this case, not only is there zero value surplus, there’s a deficit… which is why I haven’t had cable in 3+ years.
On the other hand, Netflix puts out content that you can watch on your schedule, on any device. You can cancel easily and it costs a 10th of the price. Netflix gives me so much value that I’d happily pay 2-3 times more for the same service. What’s more, if I were looking to cut my expenses, I would not be looking at my Netflix subscription.
Disclaimer: I’m a millennial, so maybe my value filter is different if you love cable!
Here are other products/services that create a value surplus for me:
- Amazon Prime
- Espresso machine
- Cheryl (my executive assistant)
- Amazon Prime is a no-brainer [for me and at least 150 million other people in the US] because of fast, 2-day shipping and on-demand entertainment.
- I use my Espresso machine every single day. Before having this gadget at home my fiance and I would go out for coffee almost every day, and we like boujee coffees that cost $4-$5. The espresso machine paid itself off within 60 days and 18 months later I’m still loving it (and saving around $200 a month on going out for coffee).
It’s not just subscriptions, services, and products that create a value surplus - people are the same.
Take my assistant Cheryl. She creates a value surplus by saving a TON of my time by taking care of tasks such as scheduling, emails, and other life stuff. With these tasks off my plate, I have more bandwidth to work on bigger creative things, which brings much more value to me and my business. (See how to hire your own assistant here).
The dangers of a value deficit
We’ve already explored what a value deficit product/service looks like; the same values principle applies to people.
I met a guy recently, let’s call him Bill, he was a perfect example of a scarcity-based employee.
Bill told me he was making 100K a year and had sold $132K of product by the end of Q3. He spoke proudly of himself for this and his attitude showed that he felt like his work was done as he went into Q4. In his mind, he’d created a 32K value surplus as he’d made his company more than he was paid.
Bill was mistaken.
Bill was tracking the wrong figures. After payroll taxes, time to onboard, fees, insurance, benefits, and office rent, Bill’s company was likely just breaking even on his output. If Bill continues with this scarcity mindset, with each month payroll that’s run his check will get harder and harder to justify until he ends up on the chopping block.
Don’t be like Bill.
Bill won’t survive in this economy.
The way to get ahead at your job is to give your employer a positive ROI. Coasting may be fine in some jobs, but to get ahead, create goodwill and get what you want out of life you have to create that value surplus.
As an employee, I didn’t always understand this concept. Instead, I saw my billed hourly rate and thought “wow that’s wayyyy more than I make”. At least 3-4 times! I had no idea of the costs involved in employing me and I didn’t understand the ROI concept.
But as we’ve seen with Bill, if your employer is only breaking even on their investment in you, then you’re a bad investment.
Think about it, how often do you hear the investment types bragging about a 0% return? Never.
I’ve said this to my team many times: We don’t sell products at cost and we don’t hire people at cost.
If there’s no value surplus, then there’s no growth - and when there’s no growth, you’re essentially on a hamster wheel that won’t ever go anywhere.
Most employers aren’t running a government jobs program. There’s no magic budget provided to create jobs to stimulate the economy without a guaranteed return.
(Sidenote: I wrote this before the COVID-19 breakout which is seemingly a magical budget 😂)
Jobs only happen if a surplus value exists to fund new hires. At BestSelf, a small bootstrapped business with limited resources, it’s my fiduciary responsibility to manage investments to ensure a return. This goes from the product we sell to the people we hire.
When making decisions on new products, we run the numbers on the cost to make the product vs the potential return. If the data doesn’t hit our minimum amount, then we don’t move forward. Typically this should be a 4-5X return and the same is expected with people on the team.
Disclaimer: I don’t mean a direct 5X return as not all roles can be equated that way (customer service is a good example of this) but essentially I’m looking for a 5X value surplus.
If I don’t see a surplus of value according to what you are paid, it’s going to get more and more difficult to justify your check every month.
As an employee, you don’t want this. You want it to be a no-brainer for your employer to pay you. In fact, your check should feel like a gift because your boss is getting a return on you.
This is how you become recession-proof. This is what leads to promotions, pay raises and career growth.
Anyone I’ve ever let go at my companies wasn’t because they were a bad person, it’s because there came the point when I could no longer justify paying them anymore for one reason or another.
If there’s not value surplus to the input or effort given, then it’s a wash.
Note to business owners! If there’s someone on your team that you don’t enjoy paying, it’s likely not because you’re cheap (hopefully) — it’s because you’re not seeing a return. Action: You need to put them on notice, and set some KPI’s or clear expectations that need to be met. If they are not met then you need to free them up, and their salary investment, for other opportunities that will be a better ROI for the company.
How to Create a Value Surplus at your Company
Now you know what a value surplus is, what are some ways you can create a surplus?
For your employer
Take absolute ownership. Here’s an excerpt from our Employee Handbook at Best Self, which explains what Absolute Ownership looks like.
Employees: Absolute Ownership - Act like an owner.
One of our core values at Best Self is absolute ownership. Everyone has a stake in the success of the company and should be passionate about opportunities with huge potential wins for the company!
Always consider what’s good for the company long-term.
What this looks like in action👇🏻👇🏻👇🏻
If we see something needs doing, we do it! We care about things outside of our own job title and department. If it’s good for the company we own it. We speak up if we have an idea. We pitch ideas and give feedback so that we continue improving all the things! If a task is unclear to you, you ask about the objectives and gather more information. When something feels stale or bloated, you ask yourself whether it needs to be done in this way for a specific reason. We get things done! We don’t wait around for permission, we take the lead and ask the right questions along the way.
When you take Absolute Ownership, you go above and beyond what is strictly in your job role. You take ownership, find problems and fix them. You look for opportunities and then break down all the steps and resources needed to take advantage.
This approach adds surplus value to your company because your manager or bosses have a million and one opportunities and problems going on simultaneously. Having the team take things off their plates or even better, directly solving problems they didn’t even know existed is AWESOME.
Running a business is like playing whack-a-mole, where it’s a constant barrage of opportunities to seize and problems to solve, as soon as one has been done another 2-3 appear. It’s like this (that’s my hammer).
In a company where the team act like owners, it can look like this:
Here’s a real-life example of absolute ownership from my employee days:
At my last architecture firm, we were pushing a deadline for a big competition and there were just three days left. I had taken the lead on gathering everything for the final presentation (even though it was never officially given to me).
We were still designing and putting assets together and realized we also needed some 3D renders that would take at least 48 - 72 hours to create. Given the time crunch, it would be next to impossible to render these given we had less than three days to go.
Rather than go to my bosses and tell them my concerns, I took 10 minutes to Google some possible solutions. I discovered a render farm that could do what we needed quickly and for less than $50. Then I went to my bosses with the problem and the solution I thought would work.
We ended up getting everything completed on time and the presentation went great. My bosses took me to get a coffee after the presentation and brought up how they had appreciated that I had not only spotted a potential problem, but that I had come to them with a solution and action steps to make it happen.
I made their decision easy and it didn’t take up bandwidth for them.
This is a small example. At the time I didn’t think it was a big deal. However, now as I hire and lead people, I LOVE it when someone comes to me with a problem solved or merely needing approval on taking an action they’ve already mapped out.
Here are some other questions you can ask to demonstrate Absolute Ownership in your work:
- How can I make more money for the company?
- How can I save money for the company?
- How can I make something more efficient to save people time so that they can focus on 1 or 2?
And here are some examples of these in action at BestSelf:
- Audit of Shopify apps to ensure we’re not paying for something we no longer use. We saved $7000 a year with this simple but effective activity. Saving money
- Switching from Sketch to Figma for designs to save time for non-mac users that can’t use Sketch. Saved time and $$$ as with Figma in use we could cancel Invision and Sketch. Money & Time saving
- Looking for opportunities: Monthly outreach to potential partners for a collaboration / Make money
- Create a Folder for the team to share great ads that they see online for inspiration for the media team / Opportunity to make money
For your customers
As we’ve already explored, you create a value surplus with your customers if they feel they’re getting more than they are paying for (like the Netflix example mentioned above).
Create a Surplus Value and customers are likely to become repeat customers - or if they’re already on a subscription, they’ll likely keep paying. In turn, you’ll benefit your bottom line through a lower churn rate plus you’ll need fewer new customers to maintain and grow your company.
My friend Nathan Barry talks about creating value with SaaS products in this blog. As a reminder, you want your customers to feel about you the way I feel about my espresso machine. Achieve this, and you’ll attract fewer cancellations and returns and more referrals [because people love to share when they feel like they’re getting a good deal]. In turn, you also get faster organic growth and more repeat customers.
You can create a surplus value through excellent customer service, a great product experience, and success with the product (i.e. their purchase solves their problem). With those angles taken care of, you can get creative.
Here’s a simple BestSelf example of what we do at BestSelf to create a value surplus👇🏻👇🏻👇🏻
Firstly, we give the customer support team autonomy and a budget to surprise and delight ten customers per week. This can be small things like a simple shipping upgrade to including an additional product.
We also started including a motivational wallet sticker for your phone with orders to surprise and delight. It’s not something that we sell in our store so you wouldn’t be able to get it unless you’re a customer.
For your employees
If you want to build an A-player team by hiring and keeping great people, you must create a value surplus for them. You don’t want a positive ROI team asset walking out the door to a better offer.
If two places are paying the same, ask yourself what else you can do to increase the value for employees so they choose to work with you rather than someone else?
Here are some ways you can value:
- Ability to work remotely
- Extra vacation time
- Autonomy in their role
- Conference or continuing education budget
- Equipment budget
- Benefits (Health, vision, dental etc.)
- Growth and progression opportunities
In your personal life
We’ve spoken a lot about creating a value surplus at work, but the same principles apply to the quality of your relationships too. If you consciously create a value surplus with those you care about most, you can deepen your relationships and strengthen your connections.
Here are some ways you can be intentional with your time and relationships outside of work.
- Organize fun events with friends:
- Book fun activities for you and your friends. For example, Escape Rooms or dinners. You don’t need to pay for everyone, just organizing the meet-up is enough
- Understand your friends’ / partner’s goals, then assist in helping them reach them:
- Send resources, books or anything you think would help someone you care about to achieve their goal.
- Even a simple amazon link is enough to show them that you are thinking of them. They’ll appreciate it.
- Become a connector:
- In his book ‘The Tipping Point’, Malcolm Gladwell talks about three different archetypes of people: mavens, connectors, and salespeople.
- Connectors are natural hubs and know a lot of people. These are people who, if you have a problem or asked a question, start thinking in their head “Who do I know that does this or has solved this problem?” They don’t need to solve your problem or answer your question — however, they can connect you with someone that does.
- Start building your network so that you can be the person that creates value through creating connections. I share more about I did it here >> How to build a world-class personal network (even if you’re an introvert)
- Discover your partner/friend’s Love Language: Then make it a point to do something to show them you care on a recurring basis.
- I even have new hires complete the Love Languages test so that the rest of the team and I can better understand them.
- Create touchpoints to let people know you’re thinking about them
- If you read an article that you feel would benefit or help someone you know, send it to them with a personal note.
While the creation of surplus value takes work, it’s never a waste. Once you become a positive ROI person, you’ll give yourself an unfair advantage, because other people or companies won’t be able to compete with you.
Surplus value is the extra mile, but it’s worth going there.
Because the extra mile is never crowded.