Value Creation vs. Revenue Extraction: Which Kind of Business Are You?

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There’s a problem in business.

Okay, fine, there are plenty of problems in the wide world of business.

Obviously, there are tons of good things in business brought about by new innovations, advances in technology, and improvements in customer engagement.

But for all the new changes, old habits sure do die hard. Specifically, there are a lot of old ideas that still have a grip on the business world.

These ideas are preventing businesses from successfully engaging present day users.

This is why so many brands are dying out; they’re failing to actually serve today’s customers. Think about your business’s focus, where you’re putting your energy.

Is your business people-first or money-first?

Because the hard truth is that a business that puts revenue first won’t be able to stay afloat in the tumultuous waters of today’s economy. It sounds counterintuitive. Doesn’t a business exist to make money?

Yes. Obviously, you need to think about profit. But when you make that your number one goal above your customers, you’re shooting yourself in the foot.

This is more than just a chicken-and-egg riddle.

This is about how and why you do business.

If you haven’t given the issue some thought, I will share a few thoughts that I think are crucial to a business’s longevity and ultimate success.

The point I’m making is simple. Businesses should work to create value not just extract profits.

Let me show you the how and why.

A Primer on Value Creation and Revenue Extraction

In terms of customer interaction, there are typically two general types of businesses: value creation and revenue extraction.

You’ve probably seen both in action before, but you might not be able to tell which one you are.

So let’s start by going over the characteristics of both types of businesses and looking at some examples.

If a business is focused on value, it will naturally put its customers above everything else. (Yes, even above revenue.)

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As the definition above notes, value creation increases your business’s worth.

Listen to that again: Value creation increases the worth of your business.

How does this happen? It happens because customers are attracted to businesses that can give them something.

The more value you provide, the more attracted your customers will be to your business.

It’s a simple (and scalable) formula, but far too few businesses actually adopt it.

Many companies still believe that a revenue extraction model is the best for doing long-term business.

What’s revenue extraction?

Revenue extraction is the idea of operating a business with the sole goal of getting money from customers. It’s the exact opposite of value creation.

This little image sums it up well:

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Where value creation is focused on serving, revenue extraction is obsessed with being served.

The type of business makes a colossal difference in how customers respond and interact.

And that’s not just theory. It’s a fact.

Quick caveat here.

Obviously, every business has to focus on profit to some degree.

Why?

It’s simple.

If a business doesn’t make a profit, it doesn’t exist. End of story.

Value creation vs. revenue extraction has more to do with motivation and priority rather than simple accounting.

As I’ll explain below, placing a higher priority on value creation will produce higher revenues.

Let’s look at an example.

UrbanBound is a company that prioritizes value extraction. They weren’t engaging their customers well enough, so they listened to customer feedback and rolled out a new marketing plan that included lots of high-value content.

The results were astounding:

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That’s what value creation can do.

Okay, that was a positive example.

Now let’s look at a negative example.

From 2000 to 2014, Steve Ballmer was the CEO of Microsoft. As CEO, Ballmer was known for focusing on sales to the exclusion of nearly everything else.

I’m smelling revenue extraction.

In an interview with Vanity Fair, Ballmer made it obvious that he was focused on revenue extraction, saying, “It’s easy to glorify the products produced and the reputations won, not the money made.”

Even his exit from the company didn’t stop him from having this mindset. In early 2017, he said of Microsoft, “I want to see more profit growth.”

Sure enough, Ballmer’s attitude contributed to Microsoft’s poor performance during his tenure. The company produced several products that flopped, share price was largely stagnant, and Forbes called him the worst CEO.

ups and downs of steve ballmer

When Ballmer announced his retirement as CEO, the stock price jumped 10%, which ironically enough, added even more to Steve Ballmer’s enormous wealth. He quits, and makes $1 billion. If only we could all be so lucky.

Interestingly, while Ballmer increased Microsoft’s revenue, his reign also saw a dip in customer satisfaction.

Some point to Ballmer as the big bad reason why Apple overtook Microsoft.

Apple, who seems to focus more on the customer, steadily grew its revenue while staying at the top of the American Customer Satisfaction Index for eleven years straight.

Today, the fact that Microsoft lost customers (and that Apple gained customers) in the long term is evident by just looking at each company’s revenue over a ten-year period.

apple revenue after iPhoneImage Source

So what’s the point of all of this?

If you rely on a revenue extraction business model, you’ll turn your customers into enemies.

Your sales might look good for a bit, but that won’t last long.

If you think about human nature, this makes a lot of sense. No one wants to feel like a company just wants to empty their wallets.

Rather, customers see themselves as part of an exchange system. They contribute money to a business. In return they get some sort of value.

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When customers receive value, they have a huge incentive to come back to your business.

And in a crowded economy, if you want to stand out, you have to win your customers over with a ton of value.

The world’s most successful businesses all think this way, and it’s proven to improve your relationship with your customers.

You might be scared right now, wondering if you’re focused on value creation or revenue extraction.

Here’s how you can tell.

Where’s your focus?

Businesses who focus on value creation and those who focus on revenue extraction look very different when you look at their priorities.

And, really, that’s all this is — a priority issue.

Pivoting from revenue extraction to value creation doesn’t require firing your employees, shuffling top management, or changing your logo.

It simply means an adjustment of priority. That can start with a simple mental shift.

I’ve identified five positive priorities of a value creation business.

1. You put the most effort into creating and refining your products or services with your customers in mind, and you continually take customer feedback into account.

2. You often ask your customers for feedback and maintain a strong online presence, answering questions and addressing complaints.

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3. You publish lots of free, value-packed content. You might publish so much free content that people tell you to charge for it. Hubspot is one company that does this often:

4. Your company ethos revolves around helping your customers achieve their goals.

5. Your marketing hinges on the benefits your customers will receive from your products or services.

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Now, let’s go over to the dark side.

Here are five signs that you’re a revenue extraction business:

1. You put the most effort into your pricing schemes and/or create your products or services with profit in mind.

2. You rarely ask your customers for feedback and don’t prioritize your online presence or interaction with customers.

3. You don’t publish free content often, and when you do, it doesn’t provide a lot of value.

4. Your company ethos revolves around maximizing your bottom line.

5. Your marketing hinges on sensational tactics (like clickbait) to get people’s attention using hype.

Of course, it’s not always black and white. In fact, your company may have characteristics from both of those lists. Most businesses tend towards one side or the other.

What about your business?

If you’ve identified your business as the revenue extraction type, don’t panic.

This doesn’t mean you’re doomed to fail, and it doesn’t mean you have an evil company.

There are several tactical ways to shift from the revenue extraction model to the value creation model.

Value begins with great content

To provide the kind of value that your customers will love, you need to make some serious changes.

In particular, you need to know what your customers want and need and then give them what they’re looking for.

Learning who your customers are is important for every business, but if you’ve found out you only think about revenue extraction, you need to kick your customer engagement strategy into overdrive.

This is where it gets good.

The best way to do this is with a killer content strategy.

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If you don’t have one, you need to make one.

But whether you’re revamping your current strategy or creating one from scratch, the steps are more or less the same.

Here’s a good framework for what a content strategy should look like:

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Let’s break that down.

Step 1: Plan your content

What kind of high-value content are you going to produce? This is a step you should spend some time on.

You don’t want to put out a ton of content if it’s just going to be watered down. Instead, focus on quality over quantity.

There’s a lack of high quality content on the web. If you’re one of the businesses in your niche that’s creating helpful content, you’ll easily stand out.

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Your content should revolve around information that will benefit your readers in some way. Sometimes that means actionable tips, and sometimes that means in-depth explanations.

Remember, providing value needs to be your core mission.

As long as you prioritize that, you’ll be on the right track.

Step 2: Audit your existing content

Even if you don’t have much content right now, you might still be able to salvage some or all of the content you do have.

If you search “content audit,” you’ll be greeted by several articles that focus on SEO.

You don’t have to worry about that too much right now, but you should determine if any content on your site is driving large amounts of traffic.

If you find something, you’ll definitely want to update it.

For all your other content, think critically about how well the content would perform. You can use sites like Buzzsumo to see what’s trending in your niche.

If you choose to keep any content, you should update it. Your existing content is probably low-value, so increasing the amount of value will be your first priority.

Step 3: Fine-tune your content process

During this step, think about how you can make a repeatable, scalable process for content creation. This needs to be a system that you can use time and time again.

First, you need to think about how you’re going to deliver the content. Will you use longform articles? Videos? Infographics?

Second, you need to create an editorial calendar that will map out what you publish and how often you publish it.

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Basically, you should have a smooth process in place that covers all the bases.

This will take some time to fully develop, so expect to make frequent changes.

Step 4: Set up a performance tracking system

To maintain a powerful content strategy, you need to know what’s working and what’s not.

In terms of content, your success or failure will be measured by how well your content performs.

Performance is generally measured using a few key metrics: views, time on page, and conversion actions (like email signups or even sales). These are also called Key Performance Indicators or KPIs.

You can see all of these metrics in Google Analytics. Once you get familiar with the platform, you’ll be able to track each metric individually to put your strategy under the microscope.

Step 5: Share your content

This is the “marketing” part of “content marketing.” If you’re serious about your content, you want to get it in front of as many people as possible.

Social media plays a big role in this. You’ll want to have a strong presence on the big social networks and share your content on them, optimizing the content for each site.

If you optimize well enough, your content will get lots of views and shares, and your traffic will grow.

One more thing: Having a social sharing schedule will let you make the most of your content.

But none of these steps matter in the least if you’re not delivering value.

That’s where it all starts.

Conclusion

To put it simply, the revenue extraction business model is outdated.

Customers have more choices than at any point in history.

If you don’t like one coffee shop or grocery store, you can easily switch to one of the countless others.

In most situations, every customer has the ability to decide where they want to spend their money.

You have to convince them that your company is worth spending money on.

That’s why so many businesses are utilizing high-value content strategies. People respond to value, and they want to give back to businesses who give them value first.

How are you going to provide that kind of serious value to your customers?

About the Author: Daniel Threlfall is an Internet entrepreneur and content marketing strategist. As a writer and marketing strategist, Daniel has helped brands including Merck, Fiji Water, Little Tikes, and MGA Entertainment. Daniel is co-founding Your Success Rocket, a resource for Internet entrepreneurs. He and his wife Keren have four children, and occasionally enjoy adventures in remote corners of the globe (kids included). You can follow Daniel on Twitter or see pictures of his adventures on Instagram.

LinkedIn Marketing 3.0 Biz in a Box Review

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The next article was initially seen on LinkedIn Marketing 3.0 Biz in a Box Review

LinkedIn Marketing 3.0 Biz in a Box is a complete & step by step course on how to make money by LinkedIn marketing, what is hot and new in LinkedIn marketing 3.0 and how to do the things step-by-step in a correct way.

LinkedIn Marketing 3.0 Biz in a Box comes with Ebook, audio & video training. The course is developed by our own team. It’s not just a copy paste work so don’t get confused with PLR word.

Did you know that there are more than 106 Million monthly active users on LinkedIn and about 80% B2B leads come from LinkedIn plus about 94% B2B marketers use LinkedIn to distribute content. So, keeping this huge potential of LinkedIn marketing in mind, Dr. Amit Pareek has just released his latest and up-to-date training course called  “LinkedIn Marketing 3.0 Biz in a Box” Monster PLR!

With this PLR you can :

  • Slap Your Name & Sell as Your Own to people who are HUNGRILY looking for it & make a huge profit
  • Use it to create a private membership
  • Use it to build your own list by offering it as a gift
  • Use it as high quality bonus with your products
  • Use it to train your team
  • Use it as high quality content for your seminar, webinar, or training
  • Use it to prospect your client & close the deals
  • Use it to grow your own business online
  • Use it to train your clients & charge them BIG Bucks
  • Use it to offer a professional LinkedIn Marketing service for thousands of dollars

LinkedIn Marketing 3.0 Biz in a Box Review

LinkedIn Marketing 3.0 Biz in a Box comes with all ready to go sales material so you could get instant return of your investment by start selling it immediately! This done for you LinkedIn Marketing 3.0 Biz in a Box comes with :

  1. High Quality Training Guide
  2. Cheat Sheet
  3. Mind Map
  4. Top Resources Report
  5. High Converting Sales Copy
  6. 6 Professional Minisites
  7. Doodle Style Sales Video
  8. Swipe Emails for Affiliates
  9. Complete Set of Animated Banners
  10. Complete Set of Professional Graphics (Valued at $240)

Viral Video FX 3.0 Review : Bonus

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Viral Video FX 3.0 is a brand new technology that automatically import viral video clips by putting video from pc or Facebook URL, YouTube URL, and creates a “viral compilation” videos using those trending viral clips.

Customize by add header and footer include text, emotion, watermark on video then publishes it to natively on your Facebook FanPage automatically.

You can easily export the viral videos to your computer to use them for another platform.”Viral Video FX” is an amazing software, it focuses on solving one problem with one powerful solution and something that will help you start putting more viral videos on Facebook for your fans and for your marketing as well.

Here’s everything you can do with viral video fx 3.0 software

  • Instant Import Video : You can import video immediately from pc, facebook and youtube url
  • Add Video Header & Footer : It’s can help you easily add text to the header and footer with text editor.
  • Insert Emotion Icon : The software’s library have a lot of emotion icon that you can easily add on header and footer.
  • WaterMark Video : You can easily to import water mark image: your logo brand, domain name, phone number…
  • Render Video : You can create and export video with slow, medium, high quality possible with your requires.
  • Save Video To PC : Video can be saved on your PC for the next time or upload to anoter social media website.
  • Publish videos on Fanpages : You can easily upload video to fanpage by input access token and choose a fanpage to upload.
  • Schedule to Publish : You can schedule to publish videos as different date & time.You can save a lot of time with this feature.
  • Newbie Friendly : This software is very easy to use, so you can use it without see tutorial video.
  • Proven Technology : This software work on window and has been created based on a proven technology.

Viral Video FX 3.0 Review

The following content was first seen on Viral Video FX 3.0 Review : Bonus

Instant Ecom Machines Review – Bonus

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The following blog post was first seen on Instant Ecom Machines Review – Bonus

Instant Ecom Machine is a Windows based software which allows you post and schedule top selling Amazon products on your WordPress website. The program can post products right away or schedule hundreds of products with your affiliate links in them so you get credit when products are purchased through your website.

Instant Ecom Machines enables you to create websites with all reviews created instantly, or schedule reviews to drip feed into your website over time. This mimics the behavior of a manually created Amazon review site…

Here are just a few benefits of the instant ecom machines software :

  • Automatically post Amazon products by New Releases, Movers and Shakers or Best Sellers
  • Automatically schedule new product review posts
  • Filter products by categories, prices, ratings and reviews
  • Search Amazon specifically by keywords
  • Completely customisable responsive template
  • Includes relevant Youtube videos
  • SEO Title feature – Include ‘buyer keywords’ in your post titles
  • And much more…

In short, if you’re looking to make money as an Amazon Affiliate, Instant ECom Machines handles the entire setup phase for you. If you’re looking to get started as an affiliate instantly, this software is for you!

Instant Ecom Machines Review

How Push Notifications Can Increase User Engagement (With Examples)

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It’s hard to imagine going anywhere without your mobile device these days. From kids tethered to their phones, to grandmas Facetiming with their grandkids, our smartphones have become as much a part of our lives as our opposing thumbs.

But just how do companies get those opposing thumbs tapping when you’re not in store, checking your email, or browsing on social media? They do it through push notifications.

Breathing New Life Into “Old” Technology

Mobile phones have been around since 1973, but shockingly, they were only used to make or take calls (and they were bulky and expensive too). It wasn’t until 2001 that Research In Motion (RIM), the company behind Blackberry, changed how we communicated on our mobile phones, paving the way for what we now know as push notifications.

Back then, if you got a new email, you’d never know it until you went to physically check your messages. This involved sending a request to the server, waiting for it to download your recent messages, and then waiting even longer for it to notify you. Because of all this traffic going to and from the server, there were limits on how many times you could do this.

With Push, RIM and Blackberry made it so that emails and updates could be received instantaneously. Blackberry devices flew off the shelves. Even the iPhone, which we typically associate with being the real game-changer on the mobile device landscape, wouldn’t be released until six years later.

But Apple was watching – and in 2009, with its iOS 3.0 update, it introduced the Apple Push Notification Service, APNS, to the world. This system was further built upon and refined in subsequent years – making it a mainstay for the way we communicate with the mobile world around us.

What Push Notifications Are and Are Not

Like a gentle tap on the shoulder from an old friend, push notifications are friendly, helpful and inviting. They are not an excuse to spam or bombard your users with irrelevant news and details. Because Push Notifications are designed to be timely, many of them revolve around actions that the consumer initiated first, such as watching a series on Netflix or booking a flight.

KAYAK notifies users if the price on a flight they’re considering has dropped. (Image Source)

Netflix sends targeted push notifications to users to entice them to watch a series, or even a trailer:

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Some, like Waze, simply work as timely reminders, even if you haven’t opted in to receive notifications, but still use the app.

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But how can marketers use push notifications to engage with their users in a way that’s not intrusive, but welcomed and encouraged? Below, we’ll take a look at several examples that showcase best practices for messaging — but first, you may be wondering:

Why Bother with Push Notifications At All?

New research suggests that up to 68% of users have enabled push notification for their apps, and marketers enjoy 50% higher open rates on push notifications compared to emails. If you have a mobile app, analysis from Urban Airship has shown that mobile app retention rates are up to 10 times greater the more frequently those users receive messages.

Like email, push notifications are a signal of user interest and some degree of trust, so keep the following strategies in mind when creating a push notification campaign your users will welcome.

Let Users Determine When, Where and How You’ll Contact Them

Starbucks Rewards has a preferences center where users can manage where and when they receive push notifications. (Image Source)

Giving the user a greater degree of control over where, when, and how they receive notifications demonstrates that you’re not only respective of their time, but are keenly interested in their business as well. This push notification doubles as a welcome message and a surprise coupon for users who sign up for Starbucks’ rewards program.

The customizability of notifications is so versatile, for example, that users can block out certain days when they don’t want to receive push notifications (such as weekends) as well as the days when they wouldn’t mind an extra caffeinated jolt (like Mondays).

Create a Rich Push Notification for Greater Engagement

A rich push notification is one that contains relevant calls-to-action, such as “shop now” or “browse”. Take a look at this example from Urban Airship which shows a push notification without and with rich media added in the form of shop and share buttons:

An example of a rich push notification with call to action buttons.
Learn how to create these types of notifications for Apple and Android devices.
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Even if you’d rather not go quite that far with your notifications, simply piquing your users’ curiosity with emojis can help your message stand out, like this example from online shopping store Wanelo:

An example of a curious push notification with an emoji for flair. (Image Source)

Go Beyond Merely “Checking In”

Most push notifications are designed to encourage you to check back in with the app and start using it again. But what if you could do more? Here’s an example from Swarm, a mobile app that lets users share their location with people on their social network. The user in this example screenshot has just checked into a sandwich shop:

The Swarm app lets users notify their social networks when checking in to different places. (Image Source)

Not only has the app bolded the friend and the location, but uses relevant icons to share where and what it is. From here, you have the opportunity to “like” their check in or comment (perhaps on a particular flavor they should try), which in turn encourages even greater engagement.

Follow-Up Based on Previous Purchase History

You’re likely using email marketing for a great deal of order follow-ups, but what about push notifications? This example, from H&M, sends notifications out to users based on what they’ve bought previously:

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You can also do this with abandoned cart notifications as well to encourage users to come back to your site and complete their order, or add accessories or other products based on their prior purchases – the possibilities are just about as unlimited as those offered with email — and because push notifications are always on, you’ll have a direct line to your customer’s attention, anytime and anywhere.

Now It’s Your Turn…

Have you used similar strategies in your own push notifications? Or are you just getting started and looking for a little inspiration? Share your success stories and triumphs with us in the comments below!

About the Author: Sherice Jacob helps business owners improve website design and increase conversion rates through compelling copywriting, user-friendly design and smart analytics analysis. Learn more at iElectrify.com and download your free web copy tune-up and conversion checklist today!