The formula for calculating value is quite simply the benefit minus the cost of achieving or acquiring the benefit i.e. value + benefit – cost. So it is important that we always use rigorous questioning techniques to uncover as many needs as possible, for which we can offer benefit oriented solutions.
The more needs we can uncover, the more benefits we can deliver, the more benefits the greater the pay back, the greater the pay back the higher the value, the higher the value the better the chance to up sell and cross sell.
Questions will uncover needs – if they are there to be uncovered – however, it is one thing to uncover the need, it is another thing to prove that there is adequate pay back and value in fulfilling the needs.
Having uncovered the needs we must probe and find out as much as we can about those needs and the implications to the customer if they are not met or fulfilled.
What we are trying to establish is the difference between what the customer used to do and how he does it now. If we can establish this then the comparison between what they are presently doing and what they may be able to do based on our solution, will be easier to grasp. This is important, because the difference between them doing something and not doing it is the “value gap. We need to find value gaps that we can attach a price to, so that we can justify the benefit in terms of added value.
Let’s take an example:
Your support customer used to have a manual stock and inventory system. Using your database for an automated system has enabled them to increase shipments by 20% per day. With the shipments of goods totalling $10,000 per day, the value gap i.e. system or no system, is $2000 per day. If the system is down it would cost $200 to $400 in lost or delayed shipments per hour. Staying as they are or going for a support agreement that would reduce down time is the value gap opportunity. That gap is worth $200 to $400 per hour..
The best product at the best price does not always win the order; we have all been outsold by a competitive salesperson probably offering less of a solution and sometimes even at a higher price.
I do hope that we no longer think about features and benefits, buy rather value.
I can only repeat that the only five words that time-constrained key decision makers want to hear today are: “Save” “Gain” “Increase” Improve” and “Reduce” – these are, or should be, high value statements, but they must be proved!