The Law of Compensation

<p>By John Assaraf and Murray Smith </p><div style="margin: 0in 0in 0pt">The Law of Compensation is an expression of how cause and effect operates in the marketplace. Monetary compensation doesn’t happen by chance or by accident; it occurs as the natural and inevitable result of a specific set of circumstances:</div><div style="margin: 0in 0in 0pt"><i>Compensation occurs when enough people want what you offer.</i></div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">Sounds simple, doesn’t it? It <i>is </i>simple. And like all universal laws, it is also incredibly powerful. The more you explore this law, the more you come to see the keys to success that it holds within its elegant simplicity.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt"><i>What you offer </i>(your product or service) is the result of an idea you’ve had. That idea is the seed of the eventual compensation.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">When you have a clear, focused, vivid idea that translates into a commercial offering that matches up with something enough people want--and want badly enough to pay for it--then you’ve created compensation. In the simplest terms, your idea is the cause, and compensation is the effect. Like everything else in the universe, the success of your business starts with an idea. But simply having that idea, no matter how strong, clear, vivid, or valid it may be, is not enough. <i>People have to want it. </i>And for that to happen, they have to <i>know </i>about it.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">You plus your business idea does not yet equal a viable business. In fact, you plus your idea plus the full development of that idea—capital investment, research and design, a facility, plant, staff, inventory—<i>still</i> does not yet add up to a business. The magic point where all these ingredients actually cross the threshold from idea to reality, where they go from being an acorn to becoming the beginnings of an oak, is the point where <i>customers </i>come into the equation.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">You, plus customers who want what you’re offering—<i>that’s </i>a business.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt"><i>Compensation occurs when enough people want what you offer.</i></div><div style="margin: 0in 0in 0pt">It doesn’t matter whether you’re a corporate CEO, a manager, a doctor, a café owner, an athlete or a computer engineer: no matter what you do, if you are out to earn an income at it, this law applies to you.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">We can break the Law of Compensation into three questions. First, is there a strong desire in the marketplace for the product or service you offer? Next, is your offering outstanding? And finally, are you or your team sufficiently skilled at marketing this offering to induce people to pay for it?</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">In other words, your business will be compensated to the degree that it satisfies three factors:</div><div style="margin: 0in 0.5in 0pt 0.75in"> </div><div style="margin: 0in 0.5in 0pt 0.75in">1)   There must be a strong need and/or desire in the marketplace for your product or service.</div><div style="margin: 0in 0.5in 0pt 0.75in">2)   Your offering must be outstanding.</div><div style="margin: 0in 0.5in 0pt 0.75in">3)   You or your team must have the ability to market and sell your offering.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">That last factor is especially worth noting. There is a popular myth in business that goes something like this: “If you have the right product at the right time, the public will beat a path to your door.” Sorry, but that’s not how it works. They won’t beat a path to your door—they <i>can’t</i>—if they don’t know about you.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">You have to have a great idea. Then you have to turn that idea into an outstanding product or service. But that’s not enough: you also have to be very, <i>very</i> good at marketing and sales.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">We did a study many years ago to see who the most successful entrepreneurs in our company were. We found one thing in common among all those individuals who were earning $500,000 a year or more: they were all spending <i>at least 80 percent </i>of their time in front of potential customers. We also found one thing in common in the low-end group, those who were earning anywhere from $25,000 to $40,000 per year: every one of them was spending <i>no more than 20 percent </i>of their time in front of customers.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">No matter what your business is, sales and marketing is its most important function, its life blood. The buying public is so saturated with media and marketing messages that it takes a highly focused and determined effort to slice through the clutter and reach your target market with enough impact to gain their attention. If you don’t accomplish that, <i>your business won’t grow</i>. It’s that simple.</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt"># # #</div><div style="margin: 0in 0in 0pt"> </div><div style="margin: 0in 0in 0pt">This article is adapted from <i>The Answer</i>, by John Assaraf and Murray Smith (Atria Books).</div> 2008-05-05T23:55:28Z

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the-law-of-compensation

2008-05-07T16:34:35Z

<p>What are the three factors that determine you will be compensated for your work? Learn how the Law of Compensation works and how to use universal laws to grow a successful business.</p>

The Law of Compensation

2009-02-24T09:44:16Z