“You need to understand your customer’s perception of the situation and demonstrate that you understand not only what they need, but why they need it.” – Rich Madara in today’s Tip 354
How do you sell value?
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Rich Madara. Rich is a Sales Capability Advisor at CDW and a regular listener to the show, which just goes to show that you can do more than just listen. You can also contribute. Here’s he is:
Rich Madara: Hi everyone! My name is Rich Madera and my tip today is about selling value, what that really means and how to do it more effectively. One of the easiest pitfalls they sell or can run into is reducing their price to move a deal forward rather than demonstrating and selling the value. This often has several undesirable or unforeseen side effects. Of course, you now have reduced revenue and profit or you’ve set unrealistic expectations for your customers about future purchases.
Think about it. We’ve all had that one customer who got a great deal from you or someone in your organization once upon a time and now they always ask for the same discount over and over. In my opinion, the worst side effect is that you, the seller and all the time and energy you spent to close the deal is now undermined. What I mean is it instantly cheapens you in all of your hard work. Your time is worth something, but it’s easy to talk about selling value and typically much more difficult to accomplish.
So let’s start with defining value for our purposes. From my experience, the value can best be described as the difference between the cost of something and the customer’s perceived benefit. The wider we can expand this gap, the better, but there are only two ways to do this. We either lower the cost to the customer or increase the perception of benefit.
Lowering the price is the easy way out. How can we increase the customer’s perceived benefit? The answer to this depends on you, your customer and the relationship you’ve built up to this point. Maybe the customer’s benefit was not that they were able to save a percentage of this year’s budget allocation, but they had their back against the wall in a time crunch and they really needed to roll out a new program quickly.
The value you provide here is time. You gave your customer time back in their schedule when they really didn’t have it. Maybe there is a complicated project your customers working on and they don’t have the expertise to complete it in house, but your organization does. The value you provide here for the customer is assurance in ownership that the job will be done correctly, which justifies the increased price you can charge.
Value can manifest itself in many ways. We just talked about time and assurance, but to your customer’s value could be a set on the new product line. It could be whichever solution makes them look like the biggest rock star to their boss or maybe it’s just a convenience factor that competitors don’t offer and they see value in making their job easier. It’s up to you to find out how to elevate that perceived benefit and the key to this is in the word perceived.
What is your customer’s perception of this interaction? In order for you to maximize the gap between cost and benefit, you need to understand your customer’s perception of the situation and demonstrate that you understand not only what they need, but why they need it. Thank you for listening to my daily sales tip. I hope you find it helpful and wish you all happy selling
Scott Ingram: To connect with Rich, just click over to DailySales.Tips/354. At the very top of that page, you’ll also find a “Submit a Sales Tip” link where you can learn how to contribute your own tip like Rich, which I hope you will.
Thanks for listening, and be sure to come back tomorrow for another great sales tip!