Creating Value: It's in the Eye of the Beholder

Jill Konrath, 26 Aug 2002

Are you creating value for your customers? Enough value? In today's new sales paradigm, unless you are creating value every single time you're with a customer, you're vulnerable to being replaced by another supplier or professional.

That's a pretty strong statement to make, but it's the most important concept for sellers to grasp in this new millennium. Since your success depends on value creation, you must understand exactly what the term "value" means -- and that can be a tough challenge since it's entirely relative.

Value is in the eye of the beholder. Your customer decides whether something is of value to them. Not you. Not your company. Only your customer. If they perceive something to be valuable, then it is.

Fortunately though, customers can be segmented into three different types -- based on their perceptions of value. For some, the value is intrinsic to the product or service, for others it's in how the product is used, and for another group it's in the strategic relationship between the two organizations.

Let's take a more in-depth look at each of these value segments:

1. Commodity Buyer

These buyers know exactly what they want and how to use it. They don't need sellers to explain the details. Commodity buyers typically value:

• Low costs. They don't want to pay any more than necessary. To be successful with these buyers, companies need to pull as many costs as they can out of their supply chain.
• No hassles. Make it simple, simple, simple to do business with your company. Give them an 800 number, send them a quick quote, or allow them to easily order on-line and they're happy.

For example, most people are commodity buyers when they order things like contact lenses and office supplies. As a seller, there's little you can do to create value except make it cheaper, simpler to order, delivered to my door and with easy returns if I need to send it back.

2. Strategic Partner

These people are looking far beyond the scope of your products or services -- they want a strategic partnership with your entire company. They're looking at how to best leverage their organization's core competencies in combination with other company's core competencies. These buyers value:

• Intimate and strategic relationships between multiple levels within both organizations.
• Mutual investments in joint projects.
• Merging of systems to accomplish more than either organization could do alone.

Working with Strategic Partners requires a major corporate commitment and is far beyond the scope of any one seller. If your company isn't capable or willing to do this, these buyers aren't interested in working with you. By yourself, you can't create the value they need.

Working with Commodity Buyers or Strategic Partners requires a major corporate commitment - something that's far beyond the scope of any one person. If your company can't or won't streamline operations and cut costs for the Commodity Buyer, don't waste your time selling to them. Or if your company isn't willing to commit to being a strategic partner, no matter what how great a seller you are, these buyers won't be interested in working with you. By yourself, you can't create the value they need.

Fortunately, most sellers deal with the third type of buyer where they can personally create the value that's needed to win the business.

3. 'I Need to Make a Sound Decision' Buyer

These buyers are either spending a lot of money on a decision or they don't know everything there is to know about what they're buying. Typically their decision process is complex, involves multiple decision makers and takes place over an extended period of time.

With these buyers, sellers can create a great deal of value by what they personally bring to the relationship. These buyers value sellers who:

• Help them understand their problems in greater depth.
• Add additional insights into the challenges they face.
• Share relevant information regarding 'best practices.'
• Develop unique, innovative approaches to resolving their business issues.
• Keep them up-to-date on trends in the industry and how others are addressing them.
• Help them find ways around the obstacles they're encountering, and ...
• Propose new ways to do more with the same investment.

These are just a few of the things these buyers value. But let me be even more specific. Say your company handles direct mailing programs for customers. Here are some examples of what you, as a seller, could personally do to create value in the relationship:

• Share ideas about other company's direct mail programs -- what works, what doesn't.
• Help customers find ways to increase the results of their existing direct mail programs.
• Show customers how to reduce the overall costs of the program while maintaining its effectiveness and integrity.
• Let customers know what their competitors are doing.
• Develop ways to increase the quality of their database.
• Work collaboratively with related vendors (i.e. agencies, telemarketing firms) to smooth out the hand-offs.
• Help customers establish important criteria for their vendor selection process that they currently may not be aware of.
• Propose ideas for new programs to help them achieve their desired marketing results.
• Act as an advocate within his own organization on issues impacting the customer.
• Suggest ways to improve the workflow between all companies and internal departments working on the project.

This is what selling is all about in the new sales paradigm. To be successful with the 'I Want to Make a Sound Decision' Buyers, you must bring more to the relationship than just your standard product or service. You must create value with each and every customer interaction.

If you do this, then even though your customer could buy your offering cheaper somewhere else or someone else, they will want to keep you around. Your ideas, insights, and knowledge are invaluable to them.

And that's what creating value is all about!

Jill Konrath is founder of SellingtoBigCompanies.com, a web resource that helps small businesses win big contracts in the corporate market. As a sales consultant, she's been successfully selling her services to large corporate accounts for over 15 years.

To learn more about how to get your foot in the door, create urgent needs for your services and develop profitable long-term relationships, check out http://www.SellingtoBigCompanies.com . Sign up for our FREE newsletter, Quantum Leaps Selling by sending an email to mailto:jill@sellingtobigcompanies.com with subscribe in the subject line.

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