The third Google principle is to drive high value creation through a low touch, high volume and high margin model. Let’s define touch, volume and margin as they relate to a business model.
Touch
First, the touch in a business indicates how many customer interaction cycles there are in the development, marketing, sales, delivery and support areas for your offerings. You need to know the type of buyers and users your business serves, and just how much maintenance these customers require. How difficult is it to market and sell the product(s) to them? Is it a solution sales process that requires a longer sales cycle? What about delivery of the offering? Is it “one and done,” or do you need to go on-site and spend time with the customer to deliver the product offering? Further, do the customers support themselves once they receive the product or is ongoing support required?
Volume
Volume simply measures the number of new or repeat customers within a period for a business.
Margin
Margin includes both the growth and net margins of the business. Regardless of what type of product or service a company sells, these depend on the relationship of direct and indirect costs with price.
Google has built a low touch, high volume and high margin business. They perform billions of transactions where they are touching the consumer very quickly and then sending them on their way. The business drives billions of transactions that are all of high value to their ecosystem.
Google has created so much power that their company name is now a verb. This is truly powerful. Their model is low touch, meaning the cost of sales, marketing, delivery, and support are very low for their business as a percentage of revenue. This is a lucrative model that provides incredible growth in terms of NR while also creating strong and growing margins. Their model is high volume, meaning billions of quick transactions occur and they do this at a high margin.
As a start-up, Google began selling enterprise search to the Global 2000 and this was a High Touch, Mid Volume, Low to Mid Margin business. The media model to which they transitioned is nothing of the sort. We, as individuals must think on how each of us can achieve this. If we are in a job that requires long hours and only affords us the opportunity to do that one job while paying us a lower wage than we would like, we have effectively built our brands and our personal business model on the opposite model of Google. We must find a way to have lower touch, higher volume, and high margin on those touches. How can we create value while we are sleeping? How can we truly add value to our ecosystem that is systemic and scalable? Google did this, and if we can achieve this model in our own personal ecosystem, there will be high returns on our time.
