Principles Of Sales, Part 2 — Value Is Exchanged
I wrote the Not So New Principles of Sales, where I identified the second not so new principle as:
“Selling is about exchanges in value between people. Each must have something the other wants, otherwise there’s no need for an exchange. The exchange can be about a variety of things: ideas, problems, dreams, information, data, opinions, and, sometimes, money.”
This post dives deeper into this principle. The concept of value is tossed around a lot in any conversation about selling, but everyone has a different context or meaning for value. Also, the over-use, or misuse of the term diminishes it’s importance. It becomes one of those meaningless things sales people babble about but don’t understand.
The concept of a value proposition has been with sales for decades. Value propositions are an important part of a process in which value is exchanged. However, they aren’t the only part and they are terribly misunderstood.
Let me start with value propositions are terribly misunderstood. Too often, we think of value as something static and generic. Websites proclaim a company’s “value proposition,” marketing provides sales the value propositions to include in their pitches to customers. We cannot define value for the customer, only the customer (or recipient) can define what they value. In constructing our value proposition, we have to first determine what the customer values, then present what we can do in the context of that value. It has to be relevant, differentiated, and unique–A “me too,” is not a value proposition.
One of the most important things about our value proposition is the accompanying Business Case Or Justification. We can’t get around it, a financial case, expressed in Dollars/Euros/Pound/Yuan/Rupees is critical—particularly in this moment, since the exchange of value is positioned as a financial exchange. If the value proposition we have presented is the one the recipient (customer) chooses to act on, then the exchange of value is that we get a purchase order and get paid for the value we create with the solution.
But value is created, communicated, and exchanged in so many different ways both before and after the actual financial transactions.
We can provide our customers insight, ideas, information that can be of value to them. It can help them learn, consider new things, identify and address problems …. all sorts of things. In turn they choose to invest their time in listening and engaging us if what we provide is of value to them. That time they invest is of value to us, because we use it to build our understanding, to build a relationship, to learn more from them.
We create value in the process. We can provide the customer leadership, advice, support in facilitating their buying process, in which case the customer considers us a trusted business advisor, making us a value part of their decision making process.
We create value after the sale through creating great customer experience, in return, they become loyal customers–providing referrals, renewals, cross/upsell opportunities.
I’ve written about it before, but there is an emerging concept of value c0-creation–where working together we create value for each other that is greater than that we could have done individually. In this case, each party is exchanging value and leveraging that to create even further value.
I’ll stop here, I’ve written hundreds of posts on various aspects of value propositions, value creation, value delivery, and value co-creation. Just click on this link, Value, to go into much greater detail. But my point is that too often we have thought of value as a one way process, focusing only on the value we create. But in reality value is an exchange–the specific value that is exchanged varies, it could be time, ideas, information, engagement, money, or many other things.
Why is this important?
If there isn’t a relative balance in the exchange, at least in perception of the exchange, the exchange is not viable. The deal collapses (if the possibility of one existed in the first place).
I think the understanding the exchange of value is important to sales people. Too often, we get caught up in trying to provide value, to create value, without paying attention to the value we are getting in return.
We invest time, energy, our knowledge, and experience–as well as the resources of our companies–in catching a customer’s attention, trying to engage them, trying to get them to change, ultimately trying to get them to buy. But if the customer doesn’t provide value in return, then we are wasting and devaluing our time.
What’s the value the customer provides as part of the exchange? Well just as the value we provide varies, it does with the customer as well. But here’s a start on how we might think of it. They provide their time, access, information, feedback, questions, engagement. They provide hard data on their challenges and issues. They provide a compelling desire to change, a dissatisfaction with the way things are and a desire to do something different. They provide a willingness to learn, criticism/questioning/pushback. Higher forms of value are collaborative problem solving. And ultimately, they invest their trust, and possibly, the future of their careers and companies—along with the money they invest in our solution.
As sales professionals, we have to pay attention to the exchange of value through the entire process, through the life cycle of our relationship with the customer. Value isn’t only measured in a business case, ROI, or the money they pay us. The moment value stops being exchanged, the relationship, the deal, the account begins to collapse. Too often, we don’t pay attention to the exchange of value–we our pipelines become filled with deals that will never be closed; we desperately discount to get a deal–because the customer doesn’t value what we provide (or values it less than we do); we invest in servicing customers who we should really be firing.
Value has to be exchanged or there is simply no value in the relationship.
As some concluding thoughts, this is somewhat a new idea for me–clearly I’m fleshing it out. It would be great to get your feedback and ideas to continue to develop this stream of thought.
Don’t forget to read three previous posts in this series:
For a free peek at Sales Manager Survival Guide, click the picture or link. You’ll get the Table of Contents, Foreword, and 2 free Chapters. Free Sample