Here's why. The "value" of a product or service is always relative to the price. Putting more "value" into a product or service either means:
- Providing more product or service for the same price as a competitive product.
- Charging a lower price than the competitor for the same product or service.
What's the alternative? Selling uniqueness. To do this, you ask yourself the following questions:
- How can my offering uniquely help them improve their revenue? How much more product could they sell? How much are those extra sales worth to them?
- How can my offering uniquely help them reduce costs? How much could they save in labor costs? How much could they save in overhead?
- How can my offering uniquely help them improve quality? How much could they save in reworks, scrap, overtime, corrective action costs, and so forth?
- How can my offering uniquely help them improve delivery performance? How much would they save in canceled orders, expediting costs, airfreight charges, and so forth?
- How my offering uniquely reduce their exposure to risk and liability? How much could they save in penalties, legal fees, and litigation?
- STEP #1: Get the customer to agree on the specific negative financial impact of the problem. Work with the customer to define ALL the ways that the problem that your solution addresses impacts their revenue and profit. Include direct costs, lost opportunity costs, personnel costs, etc., etc. Do this early in the sales cycle and make sure that the the decision maker buys into the cost analysis.
- STEP #2: Convince the customer that your solution has attributes that no other solution provides. It's not enough to be vaguely "higher quality." You need to be able to express specific quantitative elements of your entire solution that are unique from the competition. Anything that is unique about your solution (even the fact that YOU are the sale rep) is a potential differentiator.
- STEP #3: Get the customer to agree on the specific financial impact of your differentiators. For example, if your products can be at the customer site within one hour, and the low-cost competitors can only get the product there within 24 hours, what how much is it costing the customer to do without the product for 23 hours?
Follow the three steps religiously, and get customer buy-in at all three steps, and you'll find that your customers will close your deals for you - without you even having to ask for the business.
BTW: The above insights come to you courtesy of Robert Nadeau, managing principal of the Industry Performance Group. He's an incredibly smart guy who really knows what he's talking about.