Written by Sean McPheat |
Well, there are a number of ways of interpreting value and it can mean different things to different people.
For some of your customers, it could mean the actual price they are considering paying.
For others, it could enhance their overall satisfaction and experience with the products or services.
And for yet others, it could involve the speed of delivery or the time taken to start using the services.
Value IS situational.
This means that, depending on the occasion or the circumstances the prospect or customer is in, the value could be measured differently.
Let’s take three examples of ‘value’ and how they could be interpreted by the prospect:
Rational infers reason, logic, coherent, perceptive, clear and measurable.
It appears logical that the same product cheaper from another supplier is, rationally, the better value.
But rationality also can depend on the specific needs of the prospect.
Could it be they need the product this week, or they will lose a contract?
Is it possible that something straightforward like colour or style is more important to the prospect?
The business you are selling to may measure ‘value’ depending on the urgency of the situation.
You may be cheaper, but a competitor may be able to get the product delivered quicker.
Value in this case is determined by speed of response.
Also, a bottle of water may be ‘worth’ a pound or dollar to you, if you are merely picking it up from the shop on the way to work?
But how much value would you put on that same bottle of water if you were lost in the desert and hadn’t drunk for three days?
Or is it possible that your solution is more expensive, but saves more money in the long-run for the prospect?
That might be considered better value.
Rational value, therefore, doesn’t always refer to the best or lowest price.
A question you can consider when deciding the best rational value is ‘What do you help you customer increase or decrease?’
Could you increase their return on investment?
Might you increase their ability to hit specific financial goals?
Is it possible you are helping them get more satisfaction from life?
Or might you be able to decrease financial risks?
If any of these could be answered positively, you could deem these as rational value to the end user or buyer.
Value may be decided by how it makes the buyer feel.
Many scientists believe we actually make most of our decisions based on emotional connection to it, and then justify it afterwards with logic.
If you and your partner were celebrating a special anniversary or birthday, would you go for a takeaway from McDonalds?
Well, it might be cheaper than an alternative!
So why would you be more likely to go to a more ‘special’ venue and spend more money?
Because your judgement of ‘value’ would be decided by a different criteria (in this case, how it would make you feel).
Ask yourself ‘How do I want my customer to ‘feel’ after going through the buying experience with me?’
It’s a question that raises the emotional tone of the discussion and may make the buyer change the basis for making the decision from a rational choice (which is the cheaper option?) to an emotional choice (how will I feel after buying or using this product?)
Here are some emotions you may want the customer to experience after making the choice to buy from you:
Confident, aware, informed, respected, assured, secure, knowledgeable, happy, safe, proud, joyful, smart, intelligent, calm, motivated, engaged, inspired, driven, enthusiastic, a winner, prepared, in the driver’s seat, clever.
Notice that not many, if any, of these emotions are ‘measurable as such, but having those kind of feelings associated with making a decision can add power to the criteria used to judge value.
A third component to judge value against is how different or unique your value offering is to the buyer.
What can you do or offer that is better than your competitor?
What makes you different?
This would be in line with maybe your vision and/or mission statements.
They could include:
Your differentiating value can be worth a lot more to your buyer than a cheaper version or option, as you may be able to gain better results than the competition, or get to a certain level of performance quicker than them.
It creates real differentials that can be seen, experienced and even measured by buyers to justify paying a higher price.
So, when you are discussing value with your prospects, remember to ascertain what they are basing their evaluation of the term against.
This will allow you to concentrate on what really sets you apart and may improve your margins as you move away from price and onto something they value more.
Originally published: 5 December, 2018