Law of Diminishing Value
In summary, you are by far providing the best work environment of any contractor in your area. With that in mind, think of the horror and confusion you’d feel in this scenario.
YOUR BEST TECH LEAVES YOU IN THE LURCHYou’re out of the office getting some continuing education at an industry trade conference. You’re listening to the speaker and taking a lot of notes when your cell phone goes off. It’s the office. It’s an urgent 911 distress call from your dispatcher. It seems your best technician has just dropped off his truck at the shop and turned in his keys and uniform. He’s quit.
You respond with, “What happened? I didn’t even know he was unhappy.”
You have just been the victim of the law of diminishing value. The law states that once you become used to a value or benefit, if not reminded of the value on a regular basis, the original high-perceived value diminishes. You can see this law at work all the time in the world around you.
For example, when you buy a new car it’ll seem like the best thing on the road. However, a year later what are most people doing? They’re scoping out the other cars on the road and wondering about their next car. After a year of driving, the value the car has to them has diminished. They think less of it even though the car may be the same as the day they bought it.
In the resigning technician example, the generous company owner lost a valuable key employee by not defending against the law of diminishing value. An owner can combat this by constantly reinforcing the value of his company.
SELLING VIS-Ã€-VIS RETENTIONAn old time sales trainer once said there are three steps to any sales process.
1. Tell your prospects what you’re going to tell them.
2. Tell them.
3. Tell them what you told them.
Retaining your employees by selling against the law of diminishing value is as valuable as any sales presentation your company will ever give to a customer, so mastering that three step process will help you battle the threat of diminishing value.
Start by telling your employees about the benefits you are going to give them or have given them. Then, let them experience them. Finally, let them know how fortunate they are to have those benefits.
Here’s how those three steps might look. You could focus on one benefit that you offer at each of your monthly meetings. Before the meeting, let your team know what you’re going to talk about - for instance health insurance. Then, talk about the benefits they receive during the meeting. Finally, show them how fortunate they are to have that benefit by showing them how many people don’t have insurance and how much it costs the company to provide that insurance for them. The sheer amount of that check should drive home how big of a benefit health insurance is for them.
Unfortunately, unlike a system sale where you can give one good presentation and retain that client for years, your employees must be constantly reminded of the value they receive from your company. I know it may feel like you are bragging about yourself when you’re talking about all you offer, but if you don’t, you run the risk of losing a key employee.
Here are just a few ways that you can resell the value of working for your company:
• Show the actual check that you write to cover the cost of insurance;
• Have employees share stories with the team upon returning from the luxury vacations they were able to go on;
• If an employee has doubled his income from his previous company, have him share why he likes working for your company so much;
• Show your team pictures of the old, beat-up trucks that your competitors drive;
• Show the number of applicants that have come knocking on your door for work because they’ve been laid off from another company.
If you’d like a list of 25 ways to combat the law of diminishing value in your company, e-mail me at email@example.com, and I’d be more than happy to send them to you.
Start defending against the law of diminishing value in your company by telling your employees on a regular basis how fortunate they are to work with your company. Retaining your employees is how you make money every day.
Publication date: 05/28/2007