The Law Of Profitable Returns

I decided to write this post after a comment I left on my Facebook Profile. it stated:

The Law Of Profitable Returns: As long as the value of your goods and services exceeds what was paid for them, then the profit received will always exceed your expectations.

The idea behind this law came from a comment that Bob Burg left on LinkedIn, it was a link to a blog post he had written that said: "Business is mainly about two things; providing truly exceptional value to those you serve…and making a profit."

I responded to it by saying, "As long as the value given exceeds your profits, your profits will exceed your expectations. There is some kind of law we can create out of that I'm sure!"

He agreed and that's when the idea of The Law Of Profitable Returns was born.

As I'm writing this I'm reminded of something I was told long, long ago, while selling Fords in Florida. I honestly don't remember who said it but I remember the words very well, "David, selling cars is easy, all you have to do is show your customers why the car you're trying to sell them is more valuable than their big stack of money."

In other words, build so much value around your product or service that your customer desires or needs it more than the actual money it costs. Seems simple enough doesn't it? That's because it is! Value can be built in the product, yourself and the company, you should do whatever you can to build it in all three.

Always keep in mind that it's one thing to build value and another one to exceed all expectations by building untoldMaggiano's Little Italy amounts of perceived value. I'll give you a great example, Maggiano's Little Italy in Denver. I've never been to a Maggiano's before when my wife and I, along with our two children, were driving back home to Colorado Springs from Denver. We saw the building, and decided that we would take a detour and have some Italian for dinner. At first glance, you would think the prices would be insane because the restaurant's exterior is absolutely beautiful. In fact, the picture doesn't do it justice... you'll just have to take my word for it!

In fact, my wife asked me, "you okay with taking the kids to an expensive restaurant?" I said yes and as we walked through the doors I noted that the inside was every bit as beautiful as the outside, for those of you that have been to this particular Maggiano's, you know what I'm talking about. I remember walking in the bathroom, seeing the bathroom attendant and wiping my hands on hand towels that had the restaurants name on them and thinking, I wonder how much the lasagna is going be? After opening the menu I was shocked, not only was the the lasagna just $12.95 they would even give me another piece to take home!

That's the kind of perceived value that I'm talking about. I was expecting to pay at least $20 for the lasagna and was blown away when I got two pieces for $12.95. You better believe that the next day, while I was eating some yummy lasagna, I couldn't help but feel that I ripped Maggiano's off.

What kind of perceived value are your customers leaving with? Are you following up after the sale as well to give them even more value? Are you giving them ample reasons to keep coming back and to tell others about you? Just look at what I just did, I wrote a blog post about Maggiano's Little Italy, would your customers do the same? If not, why not? What can you do to build value, what can you do to make YOUR customers feel that they have ripped you off?

Always remember: As long as the value of your goods and services exceeds what was paid for them, then the profit received will always exceed your expectations.

Where are you building value?


  1. timinglis38 on November 2, 2011 at 3:07 pm

    Hi David.
    What a fantastic article.
    I love the concept of value based marketing and it's something that's becoming more and more prevalent all the time. One of the best exponents of it here in Australia is The Coaching Institute based in Melbourne. You're almost left feeling guilty when they just keep piling on free stuff.
    I think there does come a tipping point though were it runs the risk of becoming overwhelming. The sheer volume of information in this case was a lot to try to get through, and because it had sparked what Dr. Robert Cialdini calls the "Law of Reciprocity", I know that I for one felt that I had to read every article, listen to every audio file and watch every video that they had "gone to all the effort to give me".
    Still, I rave about the Coaching Institute to any who will listen, and that at the end of the day is what value based marketing is all about.
    Oh, and by the way, the owner of CI, Sharon Pearson, has wealth beyond your wildest dreams, simply because she gave away her best stuff for free.
    What an awesome concept!
    Have a good one,
    My recent post Weight Loss Diet Program: How to Get Those Washboard Abs

  2. DavidJohn_son on November 3, 2011 at 5:21 am

    Thank you for the comment Tim! I'm familiar with the Law Of Reciprocation, in fact I teach how to use it in conjunction with social media to grow your network. I agree that it's possible to go to far with giving, it tends to make people feel out ethics when they always get, get, get and aren't able to give back. Which is why I think it's important to give your customers something to do for you, such as leave you a good review or even a testimonial video.

    People know, especially now days, how important a good testimonial can be so they tend to feel better about the "relationship" if they are able to be a participating partner in it. Even asking for referrals is a great way to make them feel okay with all the over delivering you're giving them.

    Have you read a book called the Go Giver by Bob Burg? Funny I bring that up since I mention him in this post! LOL

    Thank you again Tim, comments are always welcome!

    • timinglis38 on November 3, 2011 at 12:46 pm

      Hey there David.
      You're welcome.
      Yeah, you're spot on when you say that people need to be able to give back. I remember when I first stated reading Cialdini's book and thinking, "pfft, yeah right… LAWS!" but as I read on I'm thinking, "you know, this is exactly how it works." We'll call things a law that really shouldn't be, but in this case they truly are.
      I haven't read Bob Burg's book, but it sounds like I really should do so.
      Anyway, thanks for the reply David.
      All the best,
      My recent post

      • DavidJohn_son on November 3, 2011 at 1:53 pm

        I know what you mean about laws, law this and law that, but as you can see I did name my post after a law… and one I made up no less! LOL

        If you do read that book let me know what you think, it's a good read. There are two or three, I've read them all but I can't remember how many. Anyway, they're worth checking out. Thank you again Tim!