Value – what does it mean?
While I didn’t realize it at the time, I started practicing value-based sales long before I knew what it was. I was formally trained on value-based sales and pricing in 2008, and I have been training and coaching it ever since.
When I conduct a training session or discuss the possibility with a potential client, the discussion invariably goes towards what exactly is value. It amazes me that in 2020, there are still so many people that either have no idea or have the wrong idea of what value is as it relates to the sales process. It is clear that salespeople who understand value-based sales outperform those who do not.
First and foremost, it is not the product or service you are ‘selling’. If there’s a part number or catalog entry – we are talking about a deliverable, not value. Anyone versed in statistics should understand that features/benefits level, or zero, out in any relevant sample size. That is not to say that features aren’t necessary; they are typically market entry requirements. But all your competitors also have features and benefits. Therefore, over a large enough sample of a population, they even out.
The question is, if it is not about features/benefits, why are customers purchasing my product or service? The answer lies in the intangibles, whether they be company core competencies, payment/delivery terms, trusted relationship between salesperson and customer – the list goes on. This defines seller value – but you are not done yet.
There’s also buyer value. Buyer value is more complex, so we will address it next week. However, I will leave you with a story that perfectly demonstrates value and being a trusted advisor.
I started my career with a small German company selling into the semiconductor industry. One of my best customers requested a new application from us. We had what he was asking for, however, I knew it was the weakest offering we had – I knew this customer would not be satisfied with the results. As this was a small project, I knew the customer was not putting it out to bid, so I was certain he would buy our offering. But that’s not what I did.
I let him know he wouldn’t be happy with our product in this case and told him who had superior technology. Yes, I sent my best customer to one of my competitors. He bought the competitor’s product but still hired my company for the integration work. To this day he is still a loyal customer of that small German company (now a division of a Fortune 500). I know this because many of my old coworkers are still there and I can state as an absolute fact no matter how large the project is, he just calls and places an order – many times without even knowing the final price. Often, due to the order’s size, this is against his own company’s purchasing process.
What is a lifetime of business worth compared to losing a single small sale?
