What is value – the customer’s point of view.
Last week’s blog touched on what value is from the seller’s perspective. This week is a follow up on the more complex buyer-side value. You may be wondering why buyer side value is more complex and difficult to understand. There are a couple of key reasons why:
- Every customer has unique needs and value drivers
- Customers may not fully understand their needs, or may not want to tell you as a negotiating tactic (especially if you have not yet built enough trust)
As noted in previous posts, very few purchase decisions are made due to individual features or benefits. This does not mean they are not important – because they are – features and benefits are prerequisites for market entry. But over a reasonable sample size, they all level out. Thereby making the intangibles the real purchase drivers.
Think about it this way, in the consumer market the only utility function of an automobile is to get an individual from one point to another. That being the case, why is there a market for the Chevy Spark (at $14,400) and the Bugatti La Voiture Noire (at $18.7M)? Because they are addressing two very different sets of value drivers. The value is no longer about tangible features and benefits (unless you would like to believe that the Bugatti costs that much to build). These are intangible value drivers specific to each individual.
In the consumer market, determining the buyer’s value drivers is fairly easy – Target and LV both have purses which serve the same utility function – but much more difficult in the business to business environment. However, identifying prospect’s value drivers as early as possible in the sales process is critical to success.
Some of these tactics should already be built into your business, sales, and qualification plan, but they can’t possibly get granular enough. In order to get the information you really need to win, you have got to ask questions and be genuinely interested in solving problems as opposed to selling a product or service. That is the only way you are going to understand the prospect’s value drivers and then be able to outperform the competition.
For more information about value, value drivers, and value-based sales – click on any of the links below:
