Tips & Tactics

Understand the "Value" of Your Offering to Your Customer

This month's tip provided by Gary Walker, co-founder, managing partner, CustomerCentric Systems

Most salespeople can tell me what a particular opportunity is worth to them; revenue against quota. Everyone knows the price of their offering. However, very few salespeople can articulate the potential value of their offering to their customer.

I had a client who sold software enabling petroleum engineers to analyze seismic and geological data to make informed oil and gas exploration and drilling decisions. The cost of the application was $15,000. They struggled to sell it and, when they did, it was often at a deep discount.

Even with little knowledge of the oil business, do you think it would cost more than $15,000 to drill a well? If you could prevent the drilling of an unproductive well, based upon a low probability of finding gas and oil deposits, do you think it could save at least $15,000? Inversely, if you could select the most promising sites and enhance the probability of drilling a productive well, what would a typical well be worth? Do you think that would be worth a $15,000 investment?

It was this type of conversation that the company's sales people learned to have after attending our workshop that allowed them to begin to understand the value the customer could realize from a relatively small investment. They had an epiphany! As result they began prospecting and selling to VPs of exploration, changed their packaging to five (5) user increments, raised the price to $75,000 and enjoyed record sales. More importantly, when the customer demanded a discount at the time of purchase, the first reason the salesperson gave for not being able to entertain such a request was the enormous value that the customer indicated they would derive from purchasing and using my client's offering.

If your product or service offered real value in good economic times, it offers even greater value in today's uncertain economy. Knowing the potential value that your customer will receive through the use of your offering will give you confidence, courage, and a legitimate business reason to say 'no' to a request for a discount.

Published by Bizlogx, LLC.
Copyright © 2005