How are you creating value for your customers?

Are you really creating value for your customers, or merely claiming to?  When we ask salespeople to say exactly how they add value, responses typically fall into one of three categories: 1) avoidance/no response;  2) A response based on a naïve (sometimes arrogant) belief that the product or service itself constitutes enough value; or 3) A description of pre-packed value as defined by someone in the corporate office with little or no understanding of real customers and their unique challenges. Suffice it to say, it’s a whole lot easier to claim value than actually create it. 

 

Whose value is it, anyway?

Part of the disconnect lies in who defines the value.  If you believe that “you know best” and can decide what constitutes value for your customers, then you could be imposing your definition of value on them.  And, unless you’re a talented psychic, what you perceive as value and what your customer perceives as value are probably very different.

 

In the end, value is personal.  It’s a perception, like credibility and likeability.  And it’s not your perception that matters, the customer’s perception of value is the ONLY one that matters. 

 

Now, let’s look close-up at a more effective way to define value and present it. 

 

You can’t add value to the customer until you truly understand your customer

Now, here’s the next wrinkle - You can’t add value unless, and until, you truly understand that customer. And we’re not talking about basic demographics or sales information, we’re talking about real knowledge of his/her business, industry, challenges and personal values and criteria.

 

Can you quantify how versed you are on these issues?  Let me help.  Answer the questions in the survey box at the end of this article to get a quick idea of where you stand.

 

(We’ll pause while you take the survey).     

 

If you realized after answering the questions that maybe you don’t know as much as you thought about your customers, you’re in good company.  The fact is, few salespeople really understand their customers well enough to create meaningful value.  This is true in all sales but especially in high-end B-to-B sales.

 

Here’s what happens. Sellers often lose important sales because they lack credibility in the eyes of the buyer. And, the main reason they lack credibility is they simply do not understand their customer’s business.  Amazingly, those same sellers insist they are adding value.

It’s a simple fact of psychology; prospects are not going to listen to you pontificate about how important you are to them, or what you can do for them, once they recognize you do not understand them or their business. And, there’s no way to hide what you don’t know.

 

As Barry Farber says in State of the Art Selling, “You cannot relate to a man in business without understanding his business.  A man in the oil business wants you to understand the oil business, and what a drilling rig is, and what upstream and downstream means, and what crude and refined is, and what’s OPEC and domestic, and who his competitors are, and his recent history – has it been good or bad and why.  Too many salespeople don’t know anything about business, let alone the client’s business.” 

 

Know Your Customers

The first step in becoming a true Value-Adder is to Know your Customers.  Remember, value is a perception, the customer’s perception. So don’t assume you already know what’s important to your customers, or how they define value.  Don’t assume that everyone’s challenges and reasons for buying (or not buying) are the same. Don’t assume that what worked for the previous person is going to work for the next one, or what worked for a customer last year is what will work for them next year.

 

Adding value is a dynamic, custom, customer-specific process.  Important customers are not looking for pre-packaged value or one-size-fits-all solutions.  They want a problem-solving partner who know their business and are able to create value on an ongoing basis.  

 

The Process of getting to know your customer

 

The process of getting to know the customer may involve complex market research, or it may be as simple as engaging your customers in a meaningful conversation.  Generally, it involves both. The bottom line – the more you know, the easier it will be, not only to engage them, but to make a real and sustainable difference for them.

 

Step 1: Do the research

Do the work. Start by doing some research on the market in general.  Look for industry studies, reports, and articles that provide insight into your customers, their competitors and what’s important to them.  This may take some time and effort, but you will find that the return far outweighs the effort. 

 

If you’re in corporate sales, ask your marketing department what they have in the way of insight into your customers.  Identify the key research sources for your industry.  Do your own Google searches. Get and stay plugged into the buzz.  

 

Step 2: Start a meaningful dialog

Most business professionals love to talk about their business. Unfortunately sellers fail at listening.  Worse, they fail to engage customers.  It’s well documented that sellers cannot listen because they are too focused internally on what they’re going to say next.  A better approach is to make the effort to genuinely listen and understand people within a customer organization.  Here’s why.

 

When you get them to talk about their business, their goals and their frustrations, you’ll find all the information you need to add actual value.  So, before your next meeting, vow not to talk about yourself, or your product or service.  Instead, ask some simple questions that will help you understand the customer’s business model, how his world is changing, what is working and not working, and where you can help.  That simple adjustment just might mean the difference between yes and no.  It would certainly take you a giant step closer to providing real value to them.

 

Step 3: Ask the RIGHT questions

It’s unlikely that you could create value without asking the right questions.  You want to ask your customers the right questions to you can learn more about them and determine how you can best add value.

 

You also want to make sure you’re asking yourself the right questions.  True value-adding salespeople keep this question front-and-center in their minds, “Where can we have the greatest impact on the customer’s business?”  True Value Adders also inherently believe that they win by helping the other person win.  It’s easy for them to focus on the customer because they genuinely believe this is their path to success.

 

Your Personal Value Add

Research suggests that a big part of the value equation is you, the salesperson.  You and I can sell the same product or service, and even work for the same company, but our solutions and ultimately our “value-add” will likely be very different.  Each of us brings to the table different competencies, attitudes and behaviors.

 

In fact, every solution is really a three-dimensional solution: your product or service, your company, and you.  According to the research, salespeople contribute at least one-third the value that customers receive. The company and product contribute the balance.  To represent true value, all three must be world-class!

 

As you begin to create your value-add, keep this 3-dimensional model in mind.  The tendency is to focus only on the product or service, overlooking the other two thirds of the equation. When you focus on all three, you triple the impact, thus greatly increasing your chances of writing new business and keeping that business for a long time.

 

The Payoff
The payoff for becoming a true value-adder is real and substantial.  For starters it makes for an easier sale.  Customers look forward to your visit.  They already want to do business with you. They seek you out. 

 

Another payoff from value creation is that you rarely ever have to worry about price. That is, so long as you keep the focus on the customer’s definition of price.  Tom Reilly, author of Value Added Selling Techniques, said, “If you define value in customer terms, they pay for it with a higher selling price. Conversely, if you define value in your terms, you pay for it with a bigger discount.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stay Tuned.  In Part II of this series we’ll provide some exercises and more specific how-to for creating value for your customers.  In the meantime, if you want to learn more or get a jump start, contact us today.

 

Pam Holloway

509.465.5599

pam@aboutpeople.com

 

 

About the Author

Pam Holloway is co-founder of the consulting and training firm AboutPeople, as well as the author of several Sales and Marketing books. Contact her at pam@aboutpeople.com