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Value is in the Eye of the Beholder
By Jill Konrath

One of the biggest challenges all sellers face is that we know our own products and services so well that we assume other people automatically understand us when we're talking about them. Or, we assume that they interpret the words we use in exactly the same way we meant them.

Not so, I recently rediscovered. Last month I wrote about "value" in my newsletter. I am grateful to the reader who wrote telling me he was confused about how I defined value because I never specifically addressed it in the article.

So what is "value?" This time I'll try to be more explicit - to give you a definition that's perfectly clear.

Here it is: Value is relative. It's in the eye of the beholder. Your customer decides whether something is of value to them - not you or your company. If they perceive something to be valuable, then it is.

Basically though, customers can be segmented into three different types - based on their perceptions of value. For some, the value is intrinsic to the product or service, for others it's in how the product is used, and for another group it's in the strategic relationship between the two organizations.

Let's take a more in-depth look at each of these value segments:

COMMODITY BUYER
These buyers know exactly what they want and how to use it. They don't need sellers to explain the details. Commodity buyers typically value:

  • Low costs - They don't want to pay any more than necessary. To be successful with these buyers, companies need to pull as many costs as they can out of their supply chain.
     
  • No hassles - Make it simple, simple, simple to do business with your company. Give them an 800 number, send them a quick quote, or allow them to easily order on-line and they're happy.
I'm a commodity buyer when I order things like contact lenses and office supplies. As a seller, there's little you can do to create value except make it cheaper, simpler to order, delivered to my door and with easy returns if I need to send it back.

STRATEGIC PARTNER
These people are looking far beyond the scope of your products or services - they want a strategic partnership. They're looking at how to best leverage their organization's core competencies in combination with another company's core competencies. These buyers value:

  • Intimate and strategic relationships between multiple levels within both organizations.
     
  • Mutual investments in joint projects.
     
  • Merging of systems to accomplish more than either organization could do alone.
Working with Strategic Partner buyers requires a major corporate commitment and is far beyond the scope of any one seller. If your company isn't capable or willing to do this, these buyers aren't interested in working with you. By yourself, you can't create the value they need.

"I NEED TO MAKE A SOUND DECISION" BUYER
These buyers are either spending a lot of money on a decision or they don't know everything there is to know about what they're buying. Typically their decision process is complex, involves multiple decision makers and takes place over an extended period of time.

With these buyers, sellers can create a great deal of value by what they personally bring to the relationship. These buyers value sellers who:

  • Help them understand their problems in greater depth.
     
  • Add additional insights into the challenges they face.
     
  • Share relevant information regarding "best practices."
     
  • Develop unique, innovative approaches to resolving their business issues.
     
  • Keep them up-to-date on trends in the industry and how others are addressing them.
     
  • Help them find ways around the obstacles they're encountering, and
     
  • Propose new ways to do more with the same investment.
These are just a few of the things these buyers value. But let me be even more specific. The reader who asked me to define value is from a company that handles direct mailing programs. Here are some ways he could create value for his customers:
  • Share ideas about other company's direct mail programs - what works, what doesn't.
     
  • Help them find ways to increase the results of their existing direct mail programs.
     
  • Show them how to reduce the overall costs of the program while maintaining its effectiveness and integrity.
     
  • Let them know what their competitors are doing.
     
  • Develop ways to increase the quality of their database.
     
  • Work collaboratively with related vendors (i.e. agencies, telemarketing firms) to smooth out the hand-offs.
     
  • Help them establish important criteria for their vendor selection process that they currently may not be aware of.
     
  • Propose ideas for new programs to help them achieve their desired marketing results.
     
  • Act as an advocate within his own organization on issues impacting the customer.
     
  • Suggest ways to improve the workflow between all companies and internal departments working on the project.
This is what selling is in the new sales paradigm. To be successful with the "I Want to Make a Sound Decision" Buyers, you must bring more to the relationship than just your standard product or service. You must create value with each and every customer interaction.

If you do this, then even though your customer could buy your offering cheaper somewhere else, they will want to keep you around. Your ideas, insights, and knowledge are invaluable to them.

So when I talk about creating value, that's what I mean!

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Jill Konrath, President of Selling to Big Companies and Leapfrog-Strategies Inc., helps sellers create value, differentiation and demand in competitive markets. For info on speaking, training or consulting services, please call 651-429-1922 or email us at jill@sellingtobigcompanies.com.


 
 

Copyright 2006, Jill Konrath - (651) 429-1922