Pep Talk: The Law of Compensation

You know how I love math and formulas. Regularly in my classroom training, Iโ€™ll tap the calculator app on my iPhone and conduct a quick, easy but powerful mathematical equation to prove a point. I have another one today, and it might be the most simple and most powerful.

The Law of Compensation was initially documented in an essay by Ralph Waldo Emerson and was further expressed later by Bob Proctor and Earl Nightingale.It is simply stated: The Need for What You Do x Your Ability to Do it x How Difficult is it to Replace Youย  = Your Value / Compensation.

Let me boil this down to a more simple calculation: Your Value x The Number of People You Assist = Your Compensation.

If you want to increase your compensation, you must improve the overall value that you bring to the market and you must impact more people.

How to Increase Your Market Value:

  • Product Knowledge
  • Market Knowledge
  • Responsiveness
  • Ability to Negotiate
  • Your Ability to Navigate a Transaction
  • Your Demeanor

How to Impact More People:

  • Prospect (3 Rocks of Marketing in Take Flight)
  • Leverage each transaction for additional business through meeting people off your listings and introductions
  • Database and Relationship Management (CRM)