I’ve been wondering a lot about added value recently. We all talk about it, I’ve written about it, but often I think we misuse the concept.
Sales people present their value to customers, they talk in compelling terms about the added value. These are often the things over and above what the customer needs that the sales person provides the customer.
Often, that added value is the key differentiator offered by the sales person. As sales people, that “added value” is very important. Sales people have been trained about the added value their company provides. It’s internalized, it becomes a cornerstone to each sales strategy.
But unless that value is meaningful to the customer, to customers it can represent added cost.
This is where the disconnect is. We think of added value as going “over and above” the customer requirements, it’s something that’s good, it’s something the customers should recognize, it is something that should compel the customer to buy from us. What we, as sales people, have been trained to think of as value may not represent value to our customers.
Things we think of as value may be perceived by our customers as unnecessary or added cost. Value can only be defined by the customer. As much as we’ve been trained to think of the value we present, if it isn’t meaningful to the customer, it isn’t valuable. Until our added value becomes important to the customer, we cannot leverage it to our advantage.
A banker recently called me, he wanted me to open a corporate account. He spoke of all the things he could offer me for our business. The interest rates, were less than we had in our current accounts. He kept focusing on credit cards and lines of credit. He said, I had to look at the value of his total offering. He claimed his total package was much better than I was currently getting.
But he didn’t get it. I didn’t care about credit cards, I didn’t care about the line of credit. All the things he thought were an important part of his bank’s value weren’t important to me. He kept talking to me about all the things he could package together, but none of them were things I cared about. When he thought he was creating added value, to me is was just baggage. I was tempted to ask, “If you didn’t provide me any of those things, could you improve the interest rate for our deposits?” I didn’t, I knew he couldn’t do anything about it.
Added value can be important–but only if the customer views it as important–but then it moves from being added value to mandatory. If we are going to successfully leverage our added value, then very early in the sales process, we must get the customer to declare a need for that added value and make that part of their evaluation process.
Yet we tend to do exactly the opposite. We tend to focus on added value at the end of the process, when we are trying to convince the customer to select us. We talk about “additional value,” hoping those “extras” create the difference.
What do you think? Does added value make a difference? Or from the customer’s point of view, it it just added cost?