How many sales efforts do you know of that don’t claim to be about selling “value”? Finding individual sales people or whole companies that don’t boast about offering things like “value added services,” “value selling” or don’t claim to be selling “solutions” is likely to be a fruitless effort. Yet, how many of these sellers actually know what their customers would define as value?
Moreover, how many sellers can precisely identify what kind of “value” their customers are willing to pay a premium to receive? If value is defined as something that causes a customer to reduce their price concerns, then effective sellers should be able to answer with a list of specifics. The unfortunate reality is, most will answer with guesses and platitudes.
Huthwaite’s recent research has revealed a precise and compelling definition of the overused, yet elusive, concept of value. It is the position of Huthwaite that when a seller employs the correct selling tactics, three enviable outcomes can be achieved:
Price will become less important to the customer.
In situations where the seller seeks an ongoing relationship with the buyer, the customer will erect barriers to the seller’s competition and will redefine the nature of the buyer/seller relationship.
The seller will identify areas of the expanding depth and breadth of opportunity available to them from each customer.
This is a critical topic for any company that finds itself increasingly trapped in a commoditised marketplace. It is only through real and individualised value creation that an organisation can differentiate itself from the competition and break the barriers of commoditisation.
Where This New Definition of Value Came From
Huthwaite developed insight into this new definition of client value by assembling data on several thousand transactions that had a curious common characteristic. Specifically, Huthwaite looked at transactions across a wide variety of industries (including those that are productand service-driven) which met two criteria:
The customer reported that in an effort to purchase a particular product, service or bundle of capabilities, they were faced with a group of competitors seeking their business whose offerings all looked the same. In other words, despite the best intentions of the sellers and despite the seller’s efforts to “sell value,” the buyer could find clear a differentiator: price.
Despite this apparent similarity, the customer in these transactions did not select the low-cost offering.
It was concluded that if this seemingly odd behaviour by the customer could be understood, these transactions offered a perfect opportunity to discover what customers meant when they reported receiving “value.” Why else would these customers do something so seemingly illogical? Why would they pay more to receive a product or service when an alternative competitor offered the same product or service for less? Most sellers will find the answer compelling, and one that challenges the current definition of sales excellence.