Buying Decisions: Stepping on the Value Scale
The phone’s not ringing.
The deal’s not closing.
What went wrong?
If you’re in a selling role for any period of time, you know the feeling of an opportunity slipping away.
We’re inclined to accept the client’s explanation at face value or write our own stories about why we’re losing the deal.
We were too high. The competition had a capability we didn’t. The timing wasn’t right.
Often times, we know in our gut that these are only part of the story. We often accept these as answers because they are concrete, tangible or quantifiable; we can package them and tie them in a bow – they are clean.
The truth is often messy, intangible and more personal; which is why the client is reluctant to share them with you.
So–what really did go wrong?
What if we take a 30,000 foot view of a simple question: what’s the role of the seller?
a. Make a sale?
b. Provide a ROI for the client?
c. Reduce Costs?
d. Improve efficiency?
e. Meet customer needs?
Yes, yes and yes. But the common thread woven through all of these reasonable responses is … to create value.
Neil Rackham, author of Re-thinking the Sales Force and SPIN Selling summarized his years of research: “The only single ‘truth’ that seems to be holding true for all sales forces is that they have to create value for customers if they are to be successful. Just communicating the value inherent in their products isn’t enough.”
But–what is value? How do we measure it, and what is its impact on sales revenue and profitability?
Let’s remember a simple formula: Benefits – Costs =Value
We tend to think of costs synonymous with the price we charge–for example – $1,250 plus tax – while disregarding the costs of the “hassle factor." Likewise, we tend to think of benefits as things that help the customer close a needs gap–improve efficiency, reduce costs, increase customer satisfaction. We discount a critical but less apparent value, i.e. – the way we engage with the client prior to actually making the sale – the process.
The hassle factor on the cost side, and the engagement process on the benefits side can significantly tip the scale in either direction. And your perceived trustworthiness has a lot to do with the balance of the scales.
Read the full article here.
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