Value is a term that is fast becoming ubiquitous in business. It is interesting that value can either be a noun, a verb, or an adjective. Value has so many meanings to so many different people. Yet, in the world of the sales professional, the concept of value is more important than ever.
Let’s begin with the premise that value and price are not synonymous. Value in a sales scenario is not the replacement cost either. Value is actually more subjective than price.
The price of a product or service is based on real currency exchange. If I pay a vendor 20 dollars, I receive a new t-shirt. While price has a correlation to value, it is not the same thing. Should that t-shirt be special to me, for whatever reason, it could actually be worth much more than the 20 dollars I originally spent.
One definition of value is the ability to determine “under priced” options and take advantage of them. For example, securities are often considered a good value when the price appears to be less than the ultimate worth of security. How is that determined? It is often a combination of intrinsic and external factors along with acknowledgement of both tangible and intangible elements.
Value is determined by the customer or consumer, not by the sales person. Value is a customer specific determination. Have you ever observed people making a decision where they all come to the same conclusion yet for very different reasons? The difference comes in the individuals’ definition of value and how those values are applied to the purchasing decision.
The intrinsic components of value often include the company’s reputation, the sales person’s representation and the characteristics of the product or service itself. External factors include the industry, the economy, and the competitive alternatives available.
The highest value is not typically the lowest cost.
Value tends to be more futuristic in nature. Value is the relationship between the buyer or consumer’s expectation of a product or service’s impact rather than the price paid for the product.
The ValueSelling Framework® is based on a number of sound, fundamental principles. One principle is “People make emotional decisions for logical reasons.” This principle is directly related to the value conversation.
Today, the sales professional is responsible for facilitating the customer’s buying process to result in a transaction – with that salesperson! While many things about how customer’s purchase a given item has changed over the years, the one constant is still that purchases need to be justified or rationalized in order to be executed.
It is critical that sales executives understand how the individuals and companies will make the value determination. Without it, you are hoping that the client will come to the right conclusion. It is analogous to asking someone to find you without a map or any tools. Maybe they will but it is more likely they won’t!
The value question is: Is this worth it? Each individual involved will have an individual answer:
- Is the price worth the investment?
- Is the risk worth the reward?
- Is the effort worth the impact?
People make decisions, not companies. Can each of your prospects answer those questions favorably for your products and services?
Mastering ValueSelling ultimately involves mastering the value conversation skills you have with your prospects. Selling isn’t telling! Value is too subjective in nature to be able to profess and not facilitate.
One of marketing’s roles is to arm sales executives with the potential likely value a prospect will realize if they choose your products and services. The sales professional’s role is to take the macro perspective of value and bring it into the customer specific decision-making process.
Does value still matter? Of course it does. Value matters more today than ever before. The competition for your opportunities is no longer a recognized competitive alternative, it is the vast array of decisions and opportunities facing an executive and competing for his/her dollars. Their personal assessment of value will determine their willingness to understand the business impact of your product and services.
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