Added Value has always been an important idea in at least my sales career. It was always drilled into me to articulate and claim our added value.
While we were supposed to be more sophisticated, it was kind of like, “Here are all the things you didn’t ask for that we are providing you in our solution.” Somehow those “extras” were supposed to get the customer to buy–whether it was to choose us, pay a little more, whatever. Added value was a very key part of the sales strategy.
But, I’m rethinking this whole concept of Added Value. Is Added Value Really Value Add?
Or is it added cost, added complexity, added overhead? Does it make it more difficult for the customer to choose you?
Recently, we were buying a major software tool for our company. It was a cloud based tool, the annual investment in subscriptions was $45-55K, plus some implementation services. We were looking at a couple of alternatives. It was difficult to distinguish between the solutions, both did what we wanted to do and provided all the capability we thought we’d need in the future.
In the sales process, I suppose to differentiate themselves, both sales people started focusing on all their Added Value. Again, the mentality was, “here are all the extra things we are giving you with our solution.” Both systems met our requirements, so it seemed the focus of the sales people was all the “extras.” Finally, in a fit of frustration with one of the sales people, I said, “Those things don’t represent added value to us! They represent added cost. We don’t need those things–in fact we don’t want them. Can you remove those and reduce your costs?”
The sales person was silent. To emphasize my point, I went on, “All those things add to the complexity of the system. They are really useless in our business and we don’t need them. Plus, they probably add to what you are charging, I’d like you to remove those features and reduce your price.”
Clearly, my demand was unreasonable. But too often, I think we lose focus in our sales efforts. Instead of focusing on Value Required, we talk about Added Value.
There’s another problem with the discussion of Added Value—it becomes all about us, not the customer. All of a sudden, instead of focusing on what the customer is trying to achieve and the value we provide to help the customer do that, we start talking about Added Value. The conversation shifts, it’s about all the stuff we do–things the customer hasn’t talked about, things the customer doesn’t need, but all the “extra stuff we provide.”
Added Value can be important, but it can be a double edged sword. We have to be careful about Added Value. Our focus must be on the customer.
Value is always defined by the customer. In our exploration with the customer we have to help customer look at value in the broadest possible context. But in the end the customer defines what they value and our focus has to be on how we deliver that value in s superior manner.
All that extra stuff–that Added Value–it may be important to someone else, but it’s a distraction to the customer and can weaken your position.
Is your Added Value really Value Add to the customer?
Spot on, Dave! All too often, “Value added” strategies turn out to be “cost added” impediments to a successful sale. Just as the only person who is entitled to call anything a “solution” is the customer, the only person who is able to to judge the true value of anything is the same person or organisation – the customer. With a little help from the salesperson, of course. But rattling off a list of useless features to try to establish differentiation or justify a price point or is just being disrespectful.
Absolutely Bob! Too often, what we think is Value Add, is actually Confusion and Complexity Add! We focus on understanding what customers value, helping create value, nothing more, nothing less—but what is critical to the customer. Thanks for adding to the message Bob!