Value in the sales world.
Salespeople frequently talk about value. In the modern world, the intention is to deliver value to the prospect or customer continually. The hope is that in return, they will appreciate you as an individual; they will appreciate your solution, and they will be grateful when your company has resolved their issues.
Now I agree 100% that every sales interaction should have a value component. If we can't deliver that as an organisation, then we don't deserve to stay around for very long. However, I would challenge a wide range of assumptions made by sales professionals when they use the term "value".
If we only see value in monetary terms, it should be straight forward to engage with prospects and close deals. All we would need to do is create an air-tight business case, and away we would go.
So why isn't this the case? Deals across the globe that have excellent financial outcomes, and offer significant ROI stall, they have long sales cycles, and many get lost in the graveyard of "no decision". This fact frustrates sales leaders and their teams everywhere, particularly when we attempt to make sense of these situations in purely rational terms.
For me, the failure of a purely rational approach to close a deal reveals some hidden truths about the nature of "value". Unfortunately for salespeople, value is not an entirely logical concept. It is deeply bound in human nature and the psychology of the individual.
So, what is value?
If we look at "value" at the personal level, it has three core components.
It is Personal.
In sales, we like to come up with great concepts like "customer personas" or categories (boxes) that we can use to group people. Personas may be very accurate. They can help us to identify the people in our industry who will see what we do as beneficial, will have a budget to buy it and the authority to see a project through. But the truth of the matter is, when we get in front of the person behind the persona, we have no idea what they, on an individual level, "value". As a result, if we do smart things like "lead with value" we are, in effect, leading our conversation with our best guess as to what they will find motivating. Sometimes, this guess will be right on the money and will lead us happily to a sale and glory and renown. Just as quickly, it could fail and lead to a polite exit from the prospect's office and months of voicemail jail.
Mind reading is a definite no-no in professional selling. As a result, it's far better to ask some probing questions and get the prospect to articulate what they "value", rather than make assumptions which may be wide of the mark.
David Sandler coined the phrase "people buy emotionally and justify intellectually". If we consider this statement in the context of "value" then we can get a better understanding of why deals stall, despite there being loads of "value" on the table.
Individuals have their challenges, focus and motivations. We can't divine these from across the table, and guessing will as likely take us down the wrong path as it will the right one. If we make the false assumption, for example, that all service managers are looking to increase the efficiency of their service operations, we could be very wide of the mark. Although many businesses are looking to reduce costs and increase efficiencies, on a personal level, a service manager may see any automation or efficiency as undermining to their position, primarily if it affects their people. Managers with a strong bond to their team will focus on protecting them. As a result, they may emotionally reject an "efficiency" solution as being a risk to their team, while intellectually justifying that decision as "too complex", "too expensive" or just not aligned with their goals, because they're doing fine.
The value we place on goods and services changes with the context of our situation. When things are desperate, our company faces bankruptcy; we may be willing to pay any price to secure a solution that will see us out of trouble (particularly if we, as an individual, have a lot to lose if the business goes under). Funnily enough, these sorts of situations lead to rapid, efficient sales exchanges, and money is rarely a deciding factor.
However, if you take the same solution to a business doing well, under no threat, the same people may make a very different decision. The sales process may be lengthy, the price may be a central issue, and there will likely be much back and forward and some considerable pain on the road to the sale (if a deal happens at all).
Think of it like a glass of water, when we're comfortable, and at home, it could be worth nothing to us, turn on the tap, and we have an unlimited supply. However, change our situation, put us in the middle of a desert, with no shade, for several days, and the same glass of water may be perceived as invaluable – situation determines a lot about value in this sort of context.
So, before we start to talk about value, consider the following points;
We need to build trust to put us in a situation where we can ask questions that reveal the personal stake the prospect has in the potential solution. We should aim to discover what does it mean to them, their job, their aspirations if they choose to adopt your resolution?
We need to ask additional questions to establish how the prospect feels about the current situation (without your solution) and the future you are offering them, what compelling emotional reason is driving their investment?
We need to ask questions to understand their current situation. It could be that today, our solution offers no value, and as a result, we should disqualify the prospect quickly to avoid investing too much time in a deal that will go to the no-decision graveyard.
However, as circumstances change roughly every 90 days for modern organisations, a "no" today does not mean its "no" forever. We should maintain contact with the right potential customers, as we may be able to help soon.
Value is a critical dimension in selling situations. Still, as sales professionals, we need to avoid the traps of mind reading and making assumptions about what drives investments at the individual level.
Focussing on the prospect, their needs, their motivations and their situation will more clearly define what value means in their context. Understanding personal motivations will help keep our efforts to "deliver value" from becoming assumptions that may close as many doors as they open.