What is Real Value?

Wednesday 8 July, 2015 | By: Default Admin | Tags: sales, business development

The majority of businesses have many competitors that sell a similar product or service. Getting ahead of the competition and winning the customers for your business is most often about value. That doesn’t necessarily mean being the cheapest price; it is about perceived value of your product or service and having a strategy that looks at differentiation from your competitors and the difference in outcomes.

An example given by International speaker Anthony Lannarino describes a product or service that is priced at $100,000. Your competitor sells something similar that they price at $90,000. All things being equal, your competitor’s price is lower and your dream client is going to very easily decide that the same result or outcome isn’t worth paying you an extra 10%.

So your role as a successful sales professional is to make all things “unequal”, make the customer’s think less about the actual price he will pay and more about the value he is getting and this comes back to “cost”.

Making all things unequal is explained further by Anthony Lannarino.  Let’s say your competitor’s product or service saves the above dream client, whose business you are both competing for, a total of $120,000 in direct costs. He is paying your competitor $90,000 but has saved $120,000.  That’s value, right?

However, if your product or service creates more in value by saving your client more in direct costs than the additional 10% he has paid you (by increasing their revenue, or by generating additional profit, or some combination thereof) then your cost is lower. Your upfront price may be higher, but your cost is lower because you are creating more value.

Now all things are unequal!!


Shifting the focus from price to cost isn’t easy. It requires a certain thought process from the customer and a very different sales approach from you.

You have to collect the kind of information that allows you to determine what your dream client’s problem, challenge, or opportunity is costing them. Many salespeople don’t know how to acquire this information, and some are uncomfortable asking for it. Calculating the return on investment isn’t easy either, particularly when people generally have an easier time understanding price.

Competing on price can also be a very dangerous game. There is really very little sales skill involved in selling on price alone; in fact low pricing is a business strategy and not a sales strategy. Price is something you sell on when you can’t sell value.

"Price is something you sell on when you can’t sell value."

Price, quality and speed are three aspects of sales that are often considered the most important customer buying criteria. Business writer Ken Krogue explains, “Good companies offer one. Great companies master two. A few world-class companies deliver all three”. Many years ago speed may not have been high on the list of customer priorities, however times have changed and in this age of digital technology and online selling, speed can often be the most important value factor in the purchase transaction.

Ken Krogue uses Costco as an example of one of the world-class companies that deliver on price, value and speed. Costco has been in Australia for the last few years and as most of us will understand, you know Costco saves you money, but you can’t shop without spending three hundred dollars or more. However, you trust their value, they offer high quality at a low price, with fast and immediate service!

So when thinking about the “value” of your product or service try and relate it back to how it meets the wants and needs of your ideal customer, think about how you are going to “sell” this value and if you offer a quality product, when the customer needs it, with the right “costs” you will have the perfect formula.


Peter McKeon is a CCIQ Board Member and Managing Director of Salesmasters International, a leading Sales Training company in Australia. 1300 950 073 or email info@salesmasters.com.au.

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