Trends
Sep 10 2013

Many of the biggest challenges sales organizations—and salespeople—face are problems of misaligned value.

 

When your dream client doesn’t perceive value, they are unwilling to move away from a price-based, transactional buying model. When they only perceive a certain type of value, they aren’t easily persuaded to buy a different type of value, even a level of value that is greater.

 

You can waste a lot of time and energy chasing prospects for whom you can’t align the value you create. Here is how you avoid the mistakes of misaligned value.

 

1. Disqualify prospects that don’t perceive value in your value proposition

You know the prospective clients I'm writing about here. They spend a lot of money in your category, but the only thing they care about is the lowest price. It doesn’t matter what kind of value you create; they simply aren’t buying. This is where misalignment begins.

 

When a prospective client does not-or will not-perceive what you do as valuable, you must disqualify them. It is best to eliminate these non-opportunities as early as possible.

 

One of the driving factors behind how your prospective clients perceive value is their business model. Anyone who is ever sold to Walmart understands how business models drive buying decisions.

 

If your prospective client’s business model is based on offering their clients the lowest price, they’re going to expect their partners to create value by helping reduce their costs. That is how you create value as a part of their value chain. This model requires that your prospect be laser focused on price so that they may capture part of your margin and pass it off as price reductions to their clients.

 

Disqualifying prospective clients whose beliefs or business model prevents them from perceiving value in what you sell eliminates wasted time and allows you to focus on clients who do perceive value in what you do.

 

2. Confirm that the value you create is worth paying for throughout the sales process

Your prospect has made it through the qualifying stage, but your work isn’t yet over. You have to continue to confirm that your prospect perceives value throughout the sales process.

 

You don’t get to decide what your prospects perceive as valuable. The best you can hope for is influence. As you work to help your client understand the value you create and how they will benefit, you have to confirm that they perceive that value.

 

As you work through your sales process and your prospect’s buying process, you need to confirm that what you are collaborating on and building together creates the exact value they need. If you can’t confirm that, you expose yourself to the risk of losing the opportunity to another salesperson that is better aligning their own value.

 

It’s also worth noting that different stakeholders within your client's organization may each have their own very different perception of value. You need to work to align your value with individual stakeholder needs, too.

 

3. Push back and reiterate the value you create instead of reducing your price

I have a fundamental belief. If you create value, you are entitled to keep some of it. The more value you create, the more you are entitled to keep.

 

You can do your best to prevent misalignment by disqualifying non-opportunities and confirming the value you are creating throughout the process. But you can still run into misalignment problems at the end of the process.

 

Misalignment occurs at the end of the sales cycle when the perception of value isn’t great enough to overcome price. This is where most salespeople and organizations get into trouble. Instead of sharpening their value creation, they sharpen their pencil and write down a lower price. Worse still, some decide to reduce price and still create the value that should command a higher price.

 

The right thing to do is the difficult thing to do. When you have a misalignment at the end of the process, you need to go back and reiterate the value you create and push back against discounts. You need profit to execute and deliver what you have sold. In order to capture that profit you need to increase the perception of value; reducing your price does nothing to improve the perception of value.

 

Avoid misalignment by disqualifying prospects for whom you can’t create real value, by confirming that what you are building creates the exact value your prospect needs in order to say yes, and sharpen your value creation before you sharpen your pencil.

 

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