1 + 1 should always equal at least 5,000
This week I'm inspired by... revenue management?!
I’m taking a class on revenue management.
I dove into the introductory chapter of one of my readings yesterday and David K. Hayes et. al *completely blew my mind* about how revenue managers regard what profits are.
It’s one of those “well, duh, absolutely” things, but the kind of “well, duh, absolutely” thing that gets you thinking, which is why I’m sharing it with you.
To massively paraphrase these brilliant people -
What is profit?
Many would say something like sales minus costs. But that’s from the perspective of the accountant of the seller. There’s also profit on the end of the buyer - what everyone calls “value” - value for your money. In a business transaction all parties involved have got to get something better than what they had before.
If a company only focuses on driving profits and ROI for investors they inevitably will go out of business. If a business doesn’t focus on long-term customer gain over short-term profits it will absolutely fail.
EILI5: A sale will never be a good sale unless it really does something even more awesome for both the person selling the good, AND the person buying it, long after the initial transaction takes place.
This is also known as a barter. We’re all bartering still.
The reason why this blew my mind is not that “value for your money” is a new idea.
It’s this “1 + 1 SHOULD KINDA ALWAYS EQUAL AT LEAST 5,000” idea.
Think about just about everything that you truly value - relationships, experiences, problems solved, maybe some special stuff.
It was not only totally worth your initial investment, but it all kept on giving, right?
Think about that for a moment.
It kept on surprising you with even more brilliant things that you could never have expected.
I’ve found that kind of magic is worth thinking about this week.
P.S. Our Discord group is kicking and there are some great conversations on there, including one about the dos and don’t’s of activism. Reply to this email and I’ll send you link to join us. xx