Donations from your customers

The Big Moo : Stop Trying to Be Perfect and Start Being Remarkable is the new book by Seth Gordin and The Group of 33 Authors.

While I’m waiting for my copy to arrive, a review mentioned How would you run your business if you relied on donations from your customers in order to survive?”

This concept is is like the story of how Charles Schwab at Bethlehem Steel learned to manage his time. Ivy Lee, a management consultant, offered to make Schwab’s executives more productive, in return Schwab would pay what it was worth to him after a month. After teaching the executives to make a list every evening, prioritise it and work on it in order the next day (the earliest successful todo list strategy), Charles Schwab wrote a cheque for $25,000 in the days when the average worker owned $2 per day.

There are counter examples.

I once negotiated a book contract for a friend. Originally he was going to self-publish, but I convinced him to talk to the major Australian trade publishers.

At the end of the deal we’d increased his advance, got him author discounts equal to the lowest wholesale price, plus bookclub rates out of the first print run to sell at seminars. Not a bad outcome – it changed the project from a costly gamble to a guaranteed five-figure payday.

“Pay me what it was worth to you,” I said. He figured out how many hours he thought I’d worked on it and paid me at an hourly rate that was substantially below what he’d have paid an agent.

Sometimes customers are cheap. But treat them like they’d pay what it was worth.

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