Discover the true definition of value and why most people get it wrong

'Value' is a concept often misused and ubiquitous in B2B business environments. It is frequently employed to justify deals that ultimately fail due to the incorrect application of this concept.

We often hear the term 'value' and generally assume we know what it means, yet our definitions are often different. This wouldn't be problematic if we weren't in sales, as whatever we convey to the customer has to resonate with them. For our internal conversations, it's fine to use the concept flexibly, but when it comes to selling, we need to have a consistent definition.

As we engage in initial conversations with prospects in order to understand their pain points and current issues, we may identify many desires that the customer wants as they solve their problem. Depending on the hierarchical level of the people we are talking to, this may sound like increased customer satisfaction, time savings, operational efficiency, and so on. Essentially, anything a prospect wants as an outcome could fit into this list.

And this is where the problem lies! We need to understand how to keep questioning the prospect to deepen our understanding and find true value.

So, what are we going to define as 'value'?

Value should be understood only as something that directly impacts a company’s revenue, costs, or risks. It sounds pretty obvious and simple, but why do people always get it wrong? Well, that is a question I’m still struggling with, but if I had to bet, it would be the word 'directly' in that sentence.

So, to clarify a bit more, if a prospect tells you that the impact they will get after solving the problem is time savings, that is still not valuable based on our most recent definition. We need to understand more about how those time savings will impact the prospect’s revenue, costs, or risks, so we keep asking questions to get a better understanding, and moving the conversation to revenue, costs or risk. A very handy tool that we can keep using to guide the conversation is asking ourselves, ‘So what?’.

What is the ‘So what?’ rule?

Pretty simple. We will be thinking to ourselves during the conversation, 'So what?' as the customer explains their problems and desires. We keep probing until we arrive at revenue, costs, or risks. Let’s understand how to use the 'So what?' rule in the time savings example, and any other example not associated with revenue, costs, or risks, for that matter.

Prospect: Our current process is taking too long to finish, we would like to improve it.

Your Insight: Is this directly associated with revenue, costs or risks? No. So what if this is not improved?

You: What is the current impact on your business when the process takes this long?

Prospect: Well we have people staying late and during the weekends to finish it on time.

Your Insight: Is this directly associated with revenue, costs or risks? No, don’t assume anything! I know some of you are thinking this is the end of our questions, we cannot assume anything about people staying late, this is not associated to revenue, costs or risks. So what if people stay longer at their jobs?

You: I know no one wants to stay later at their jobs but sometimes we have to. Why are you so keen in solving this issue? Is there any financial or risk associated impact to this situation?

Prospect: Well, we pay them extra hours, so that is an additional cost we are incurring as a company. But the major issue is that sometimes we don’t meet regulatory deadlines, which could result in substantial fines for us.

Your Insight: Is this directly associated with revenue, costs or risks? Yes! Extra hours is a cost that the company has to incur because of such delays and regulatory risk is definitely a huge risk that they are exposed to!

Hopefully, this illustrates how to apply the rule during a conversation with a prospect. Once you practice it every day, it will become second nature to you.

What are the things that look like value but arent?

Talking to a lot of salespeople, I see very often how value is not identified properly. Some of the examples below:

• Improving efficiency.

• Reducing times and delays.

• Automating processes.

• Improving visibility.

• Improving speed.

These are just a couple of examples of what is precisely not value. These items alone are not able to close a deal by themselves; they need to be understood from a revenue, risk, or cost perspective in order to show a compelling case that whatever we are selling provides a positive ROI to our customers.

This understanding must be achieved in great detail. As salespeople, we need to understand all the intricacies of how our solution will actually deliver value. We have to describe exactly how we will deliver this value and, if possible, quantify it.

Should we finish our understanding of such value? No! We need to quantify it and then understand what kind of value type we have discovered. We must determine if it will be enough for us to build a tangible opportunity to close a deal, but that will be discussed in another post.