Have you ever wondered what makes people value something, and why that may be really different to how you see it? I certainly have. A couple of quick insights to share on this one…
Last week my daughter asked if she could buy some Robucks (for those without under 13’s this is a currency to use on the Roblox game platform where you move avatar / character around various game worlds).
I asked why?
What do they do?
How much are they?
She said that they would allow her to buy a new way of walking for her avatar. My initial reaction was “Not a chance”. I am not paying anything for a new digital way of walking, what a waste of money. But to her it was really important, the value to her was to be different, fun and interact with friends. Eventually we came to a deal and it did only cost £2.
A second example on a completely different scale. Which would you buy (on face value):
An international airport for £12.1bn (2019 revenue £900m and 44m customers per year)
Or
A major national supermarket for £6.3 bn (£17.6 bn revenue and 605m customer per year )
I am not going to answer this, but I thought it was a really interesting comparison given that these examples came up for sale in the last week and there is a huge difference in price per customer. Depends on what you value.
People, and therefore your customers, all value different things. Yet this is the area I see so many businesses and salespeople completely miss. Businesses think that what they have to offer is the best thing in world, that all the features they have is EXACTLY what you need.
We have probably all experienced the sales pitch where the salesperson believed they had done a great job telling you about their solution and the customer felt misunderstood and not listened to. I certainly have. Customer value can be a very personal and variable thing which is why it can be easy to misunderstand. If you want to break this down into a formula it looks something like this:
Customer Value = Benefit – Cost
The benefits and costs can include both perceived and actual elements but the overall balance should be a positive number. To understand what these benefits and costs are you need to take the time to understand the situation from your customer’s point of view.
To do this well, you need to ensure your sales team have:
- The right mind set
- The right skills
- The right behaviours
- All backed up by the right solution
- Supported with the right culture.
When you get this right you will find that your customers enjoy engaging with you, referrals occur naturally and you will experience a smoother sales cycle. If you get this wrong you will have an uphill struggle.
So, how do you do this?:
- Review what it is you are wanting to sell and check that it meets your customers’ needs.
- Review how your team are performing and ensure they have the right skills, support, tools to understand customer value
- As a leadership team commit to supporting a customer value led sales culture (Vitally important!)
The tricky part is that a lot of the answer to this sits within your team.
And I say tricky because you can’t just flick a switch to make instant improvements. It will require some investment (both time and money), leadership and willingness to do things differently. This can also be a huge driver for change, improvement and team building.I’d be keen to know what you all think on this subject, share any good (or bad) experiences below, and please feel free to contact me directly if you want to discuss any element.