[This article originally appeared on the American Express Open Forum]
A large portion of my business is public speaking. And I know many others who make their living the same way. But to be perfectly frank, companies are often wasting their money when they hire a speaker. I say this not because there aren’t many gifted men and women who can deliver an engaging presentation. The problem is with the customers, not the speakers.
As Oscar Wilde once said, “a cynic knows the cost of everything and the value of nothing.” Using this definition, most buyers are cynics.
The truth of the matter is that your customers do not know what they truly need. And they certainly do not know how to define value.
This creates an opportunity for you to engage your buyers in new ways, generating more value for them… and greater wealth for you.
To test the hypothesis that my customers could not articulate what was valuable to them, several years ago I tried an experiment. I called it “PW3 – Pay What We’re Worth.”
As background, in determining the fees paid to a professional speaker, traditionally the speaker sets the rate before the work is done. With the PW3 experiment, I turned this model upside down. Instead of quoting a standard rate, the client would determine my fee after the work was done.
The plan was to send the client a blank invoice after I gave a speech, and they would pay “what I was worth.”
The only stipulation was that we would have a conversation about value up front. I wanted to learn the value they got from previous speakers. How were the concepts reinforced after the presentation? How were ideas implemented? How was value measured?
What I discovered was that Oscar Wilde was indeed right. Companies were unable to define value, at least in terms of tangible results. In fact, in nearly every situation, when I asked them how they would determine what to pay me after an event, they said, “Um, I guess we’ll pay you what we paid the last speaker.” In fact, with 90 percent of my speeches, the client asked me for my standard fee and just paid that.
How can you create exponential value for your customers? How can you in turn create greater wealth for your organization? Let’s first look at the way organizations tend to operate.
In my work, I have defined three levels of innovation:
Level 1: Innovation as an event
Level 2: Innovation as a process
Level 3: Innovation as a system