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August 6, 2013

Real Value

by mrshmooze

If you have been in sales for a while, you know that the past few years have been especially challenging. Buyers are still remembering the financial crisis of 2007/2008 and are very wary of building up fixed costs to pre-crisis levels. Meanwhile, companies are finding ever more ways to cut costs with technology and if you happen to be selling into a cost cutting situation, now, more than ever, you are going to need to prove the value. 

A great value proposition is the essence of selling. It is making an elegant and articulate case that we are selling something that is well worth the price we are asking for in terms of the benefits that will accrue to the buyer. Buyers are very, very smart, and today, they have access to all sorts of research on the Internet so we must craft a value proposition that can stand up to well-informed buyers.

Among other things, we sell an online assessment for helping companies determine whether certain, non-teachable characteristics are in place before hiring managers should go to the next step in the recruiting process. The assessment costs $200. As you might expect, there are some prospects who recoil at that price point. They start to do the math and can see that if they have to test, say, five people for every candidate who they determine is a good bet for interviewing, that could be $1,000 per candidate. That $1,000 solidifies quickly as the proverbial elephant in the room early in the sales discussion.

But then we ask the prospect to think about it for a minute. What is the cost when a salesperson is hired and does not meet expectations? The time lost interviewing? The recruiting fees? The time lost managing and mentoring? And the opportunity cost having someone in the field who is not producing?  We run the numbers together and these costs almost always exceed $100,000 . . . sometimes much more. In that context, the $200 assessment takes on a different perspective.

The most compelling value propositions involve provable metrics laid out in a logical sequence that is both compelling and easy to understand. With most products and services, there is an opportunity to build a powerful case when we expand the conversation to include a longer timeline so that we are not just talking about the point of purchase . . . we are talking about benefits into the future (or costs if a compromising decision is made).

So yes . . . it is challenging out there . . . but like a great lawyer preparing for an important trial, if we can build a deep and solid, metric-based value proposition, we will always be able to compete at the highest levels.

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