While sales people sell products, customers buy value. This is a very important thing for any sales person to remember. Unless you can define the value of your solution to a customer, then they are going to struggle to understand why they should buy it. As the saying goes, “Value is not determined by those who set the price. Value is determined by those who choose to pay it.”
One of the reasons that I started my sales consultancy was my experience in buying a house. We were not really buying a house, we were buying a home. It was going to be where I lived with my wife and children, created memories, welcomed guests into etc. When you first enter a house, you have to see how you can live there, who will have what bedroom, where will the dog sleep, where the furniture will go and much more.
When we went to look around houses, too many estate agents or sellers told us about how they used the house, or described features that we had no interest in. They made no effort to find out what was important to us or to create a picture of how we might live there. We had to do all of that ourselves, which is not always easy.
However, a house is much easier to understand than some technology. Imagine how some executives feel when presented with new technology that they do not understand; when a sales person lists a number of features that mean nothing to them. The executive has to understand how the technology will improve their business. They have to be able to imagine a brighter future that it will bring. They have to understand the value.
What constitutes value to one person does not necessarily constitute value to another. A meal for two at a great restaurant that costs £300 might be considered good value by one couple but not by others. One person may be very happy to buy a pair of shoes for £40 when another would never pay that amount. We all have our own perceptions. Just pricing your products 25% cheaper than your competitor does not mean that everyone will always buy your products. There is more to a purchase than just the price.
Value has little to do with price. A corkscrew is much less expensive than the bottles of wine that it will open but it is crucial to the enjoyment of the wine, as anyone who has tried to uncork a bottle without a corkscrew will tell you! Only if a product is a commodity does price really matter. An item can be considered a commodity when it has no other inherent communicable “value” than its price. Plain, white envelopes are a good example – all brands are basically the same and if we are buying them online, we will generally buy the cheapest. However, if we are out shopping for other goods, we may choose to buy the envelopes in the most convenient store even if they are more expensive than in another store. In this case, there is value in the time saved by buying them with everything else rather than visiting a number of shops to find the cheapest. This can be considered a perceived value in that it is only of value in those specific circumstances.
Creating and selling goods that are a commodity is extremely difficult as there is a lot of competition from large companies. To compete in a market like this, it is necessary to create a perceived value. For example, you might use recyclable packaging; use all renewable energy to create it or manufacture and sell locally. These factors create a “different” product and appeal in ways that the large company cannot. By doing this, you are creating something bigger than you are actually selling and creating value in that way.