Take Value to the Next Level

Posted by Reed Holden on Jul 31, 2019 3:46:04 PM
Reed Holden

It was a tough conversation but in the end, it was simple and quite insightful. It started with a client pushing back on price. We responded that it was going to cost us a lot to get the job done. She came back saying it was a lot of money to support only a few people, especially when they had more to train.  We realized that we could run the engagement with more people in the same session…same cost for us and better outcomes for the client. The client was happy and placed the order.

We've spent a lot of time over the years talking about value. Let’s push our thinking to outcomes. That is, what will a customer “get” for doing business with us? What impact or outcome will result from a purchase from a supplier? Yes, it is a bit of a semantic play, but the pricing business spends way too much time talking about value without getting to the important issue: what is it that customers really want to get as a result of doing business with us or a competitor, and how does doing business with us result in a better outcome?

In B2B, the results a customer looks for can be reduced risks and/or costs, new or faster product introductions, and innovative products that drive both more revenue and profits. When pricers focus on outcomes along with costs, they can tell if their costs are reasonable if the outcomes justify the prices they set and if the prices are fair.

When salespeople begin to focus on outcomes, the benefits are even more dramatic. After all, it is the outcome the customers really want, and that leads to higher customer satisfaction and long-term loyalty.  Since procurement people are often disconnected from real outcomes, the customer conversation moves to people who really matter: users and decision-makers. If salespeople can learn to have the right conversations with those people, they will be better at crafting the solution to meet customer needs.  That inevitably is going to move beyond the core product and service to include features that augment the customer experience.

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Topics: value