The market determines price and only the customer is qualified to assess value for money. Everything we sell must help customers improve revenue and/or margin; or reduce cost, time or effort; or reduce their serious risk.
The basic equation for value is: Business Value = Benefit minus Cost and this is why it’s so important to ensure all ‘benefits’ are expressed in monetised form wherever possible. Yes it’s true that not all benefits save or make money for our customer. As examples; less stress or risk, improved productivity, less risk in non-critical areas… all of these can be difficult to justify in financial terms. But the language of business is nevertheless numbers, not words, so always ask yourself: How does this benefit drop to their bottom line or improve their balance sheet.
But more sophisticated buyers seek Value For Money (VFM) and beyond Return On Investment (ROI) or Total Cost of Ownership (TCO), they usually have a weighted selection criteria to determine whether a solution is Fit For Purpose (FFP) and from the Lowest Risk Profile supplier.
Think about this formula as you engage with customers who make comparative decisions, contrasting you with your competition. It is essential that we meet the exact requirements and also be perceived as representing the lowest risk. These two factors are then weighed against the total cost of ownership but take the effort to really understand how they assess this internally; don’t make assumptions.
All of your assertions concerning value and risk need to be considered from the customer’s point of view… after all, the market determines the price and only the customer is qualified to call something a solution and determine the value to their business.
Tony Hughes is ranked as the #1 influencer on professional selling in Asia-Pacific and is a keynote speaker and best selling author. This article was originally published in LinkedIn where you can also follow Tony’s award winning blog. Also visit Tony’s keynote speaker website at www.TonyHughes.com.au or his sales methodology website at http://www.rsvpselling.com/.
Main image photo by Flickr: striatic
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