I recently spoke with a major supplier to semiconductor manufacturers. The semiconductor industry has a handful of global players owning 80% of the market. Predictably, the supplier’s business model is heavily reliant on a few large customers. Because of this reliance, the supplier’s marketing team is well-schooled in measuring value delivered to customers. They knew critical semiconductor KPIs like cost of ownership, yield, performance, and risk. Their value analyses align with improving performance in these key areas. The value toolset is impressive – I had never seen such models and spreadsheets that calculated value so completely.
After reviewing their vast materials, I had to ask, “What’s the problem?”
They told me that their sales team did not use the tools, and their customers did not believe them.
When I dug a little deeper by asking good questions, it became apparent that sellers and customers did not believe in the value for three reasons:
- The value models are overly structured, rigid, and complicated. They did not allow sales the flexibility to build or adjust value with the client to create a believable and agreed upon story. As a result, customers perceived them as wrong. Salespeople lost confidence. The value calculations are precisely wrong, not roughly right.
- The value models are built internally by marketing without sales or, most importantly, customer input. Just as products need customer input, these models need information directly from the stakeholders and users. They are precisely wrong, not roughly right.
- The value models are positioned and designed to precisely calculate value for the sole purpose of justifying price. They lack customer language, appeal, understanding, and, most importantly, timing. When the models are presented by the seller for the first time at the price discussion, customers feel distrust in the validity and reliability of the numbers. The result is the opposite of what they wanted: price-skeptical customers. They are precisely wrong, not roughly right.
At Holden Advisors, we know that value is at the core of building better and lasting relationships. Value data needs to be based on customer input. To improve their credibility, value calculations need flexibility, so sales can have a discussion with the customer and make changes. Finally, value data needs to be turned into value questions and stories that sellers and marketing can use throughout the selling process and buyer’s decision cycle.
Request a consultant with a value expert if you want to discuss the opportunity to make value real for your sellers and customers.