‘Value Proposition’ is a hackneyed term – we need to understand its true meaning – Interview by John Smibert
He reminds us that ‘Value’ is in the eyes of the beholder and that perception will vary from company to company and individual to individual.
We need to understand that unique perception of value for every client. Only when we do so are we in a position where we can progress to proposing how we can help them achieve that value.
Steve is a thought leader in sales. He’s an author and writer, most notably for BRW, and his focus is on helping people sell more effectively at higher margins.
John: Steve, in all the discussions we’ve had so far you’ve bandied the word “value” a little bit. I know I use it a lot, and it gets this hackneyed sort of feel – we all say we’ve got to focus on value for the customer. I’d like to explore that a little bit more, and it is a hackneyed name, isn’t it?
Steve: It is, yes.
John: So, what do we really mean by ‘value’, and how should we be drawing it out properly?
Steve: Well, ‘value’ is in the eye of the beholder. What’s important to one person is not important to another person.
John: Very true.
Steve: Companies have a value proposition.
John: You mean the supplying customer has a value proposition they present to a marketplace?
Steve: Exactly. If we’re trying to sell something to someone then we need to know what value we can give, but because we don’t yet know the individual and because our value propositions are done at a global or a generic level then we know generally what value we could add – but we don’t know what that means to a specific company.
John: And I get so many salespeople taking the generic customer value proposition and making that the key value proposition they put on the table.
Steve: Well, you’ve have to start somewhere, but you’ve got to find out what’s important to the particular company.
John: But I’m talking about down the track, when they’ve done all their ‘discovery’ and they still use the generic value proposition.
Steve: Well, you can be lucky and it does work, but a lot of the time it doesn’t. The value you see depends upon your particular situation, the role you’re in. The value proposition for a CEO is different to the value proposition for someone in charge of marketing.
John: So it’s not just a value proposition for the company you’re selling for, it’s an individual value proposition for all the individuals involved in the decision.
Steve: It’s based upon the role, it’s based upon the company, it’s based upon the industry, it’s based upon the history and what they care about. All communications are received by an individual.
John: And it’s in the eyes of that individual, it’s not something we are telling them what it should be.
Steve: Absolutely. We need to find out what it is for them and then show them how they can achieve what they want. So, we know generally what we sell and we know generally the value we can give, but we have to find out what value they see in it and what that value means to them.
John: Otherwise it’s pointless even trying to go ahead with the sales process.
Steve: Well, it’s much more difficult.
John: I’d qualify out unless I can get that value proposition very specifically to the customer.
Steve: Well, I guess the good news is that very few people actually do that, so if you do do it then you’re well ahead of the game. And if you don’t do it then you’re slim with the chance. But yes, it can be done without it, but it’s much more difficult.
John: So, the bottom line is: ‘value’ is in the head or the eyes of the beholder, you have to understand how they perceive value, and that requires a great deal of questioning and discovery to really understand that before you’re in a position to even think about what solution you’re going to put on the table. Great advice, Steve!
- “Borrow your customers shoes“
- “Building Genuine Rapport“
- “Questioning for credibility and insight“
- “How to prospect”
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