I felt that it was important to use today’s Sales Insight blog post to discuss the idea of communicating value to your customer for increased sales.
Why “Value” Is So Valuable
In my role as a sales coach and trainer, I am quite often approached by sales managers and leaders, or even individual sales people, telling me that they are struggling, during negotiations with customers, to protect their margin and avoid being forced to discount.
My response to this is that negotiation is unlikely to be the source of the problem; the real problem instead lies in being able to create or communicate enough “value” to these customers. If you cannot create or communicate value earlier in the sales process, all you will have left to negotiate on at the end of the process, is price.
The Value Factors
There are three components to value in the sales process:
- Create – we need to be able to create some new value for our customers.
- Communicate – we need to be able to communicate the differential value we bring, in a way that ensures the customer has absolute clarity.
- Capture – the final component is that we need to capture, through negotiation, a fair share of the value that we’re creating.
As we know, sales people typically believe that the challenge of holding on to margin occurs at the ‘Capture’ stage, however, when we view value as the 3-Step process detailed above, we can clearly see how poor performance at the ‘Create’ and ‘Communicate’ stages positions us weakly for the final negotiations, or ‘Capture’ stage.
In practical terms, we’re looking for that area of crossover, where our product/service offering overlaps with the challenges and needs of our customer, but where our competitor’s does not. It is this area where the magic happens, where we can uniquely deliver value to our customer.
How Do You Use Value To Stand Out From The Competition ?
We are not alone, nearly every sales person and organisation is looking for that magical “value”, so how do we set ourselves apart?
I think there are three things that, as sales people, we need to make sure we are experts in:
- Our Product – we need to be expert in our own product and service proposition, because when we know our own proposition in great detail, we are able to find greater opportunities with our customer.
- Our Customer’s Business – We need to be an expert in our customer’s business. By understanding the customer’s business in depth, we can again find additional opportunities. This was discussed in the blog post “Improving Your Understanding Of Your Sales Prospects With Insights.”
- The Marketplace – Finally, we need to be an expert in what’s happening in the marketplace – what do our competitors’ propositions look like? Only then can we find the unique nuance of our product or service offering that allows us to differentiate ourselves from the competition.
Now You Know The Value – Communicate It Effectively To Your Customer
Once we’ve found that value, we need to make sure that we articulate it in a way that comes across as a number for our customer.
Our view is that value is a number, everything else is just noise. So, when we are talking generally about the features and benefits we bring, it doesn’t cut through a customer’s desire to understand the return on the investment they want to achieve. A specific number, however, very clearly articulates their return.
There are three pointers we can use to help identify the numerical value of our proposition:
- Revenue – does your proposition help the customer to generate additional revenue in some way?
- Save Costs – does it save them money, through reduced costs and outgoings?
- Reduce Risk – does it reduce risk and give them greater security or certainty? The most emotion-led of the three, don’t disregard the value this can bring.
I will explore this essential skill in more depth in a future blog post and will look at how we can work through a process to make sure we’re creating compelling, numerically based value propositions that really make the difference between you and other sales people out there.
If you’d like to have a further chat about this or how we could help you inside your own organisation, then please contact me email@example.com. Thank you.