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More to the point: Are you unnecessarily losing margin by always leading with low end proposals? I was. Here’s what happened: I got too comfortable with the way I was selling, and began to apply the same scenario to the majority of my clients. The following is what came out of some deep soul searching: better value creation and a win-win for me and my clients.

Value Creation in Sales

Customers Are Like Snowflakes

I’m generalizing again, and I hate when I do that. The point is valid though: There’s so much that can be different from one opportunity to the next. Customers are like snowflakes: no two are the same, and we lose if we start to treat them all the same. Unless we look at each customer as a unique entity and build to their unique set of values, we stand to lose at least some of the margin we could have simply because we didn’t take the time to correctly assess the scope of the opportunity for them and for us.

I’ll Tell You When I’ve Had Enough!

Good to know the what, but reflecting on the why of my sales efforts being slanted this way was hard. The reasons for what we do are sometimes difficult to determine. When I am honest though, I think the main reason I was not bothering to propose larger programs is that I was afraid that the prospect would have issues with the high cost. The truth is though, that cost is directly related to value. If something is worthwhile for what the business needs and wants, cost is never an issue. Customers will tell you when they’ve had enough, but if you never present them with the option of a comprehensive program, you are not only shooting yourself in the foot, you are cheating them of the value they could realize.

Show Me The Money

Value is realized when cost is proportionate to benefit. This is the real job of sales: to show business owners the money. They need to see how what you’re proposing makes them grow sustainable profitability. In some cases, the low end solution may be ideal, but if you are honest with yourself you may find that you’ve taken the low road a few too many times, and it’s showing in your revenue results.

Take The High Road With Me: Get Good at Value Creation

I challenge you to take of your comfortable “glasses” and look at your next opportunity in a new way. Forget that you have ever sold anything before. Talk to your customer about what they value. Delve into every aspect of how they determine success. Then look at the possibilities together. Naturally, they want the least expensive option. Until you show them the greater value of anything else, they will always opt for the “cheapest” way out. Give them choices that makes sense based on what you find together and tie each line back to the value you established together earlier.

A Question For The Manager

Many organizations do not share strong links between sales and other departments This is a shame. They operate as separate silos with separate goals and separate compensation plans. As a result, they tend to serve their own autonomy rather than building more value for customers! Is there a way to bring both teams together in such a way that higher margins result? The introduction of the 486 chipset from Intel illustrates this point. It had a built in math co-processor that significantly increased processing performance for calculation intensive applications. This is a good thing right? Engineers beaming at their accomplishment; Marketing projecting high growth; Sales salivating over the potential revenues. The problem though, was that it also increased the cost to the consumer, placing it outside of the price range of some buyers. The solution was brilliant: rather than create another less expensive chip from scratch (which would have cost millions, and missed the window of opportunity for early adoption,) they simply disabled the math co-processor on a subset of the chips, reduced the price point and were able to please demand for both markets. What can be done to provide the most valuable set of options for your marketing and selling teams?

Check out what these other industry experts are saying about value creation:

Anthony Iannarino – The Sales Blog: Value Creation (Video)

Jeff Thull – Value Creation: The New Core Competency (MarketingProfs)