Sunday, November 13, 2011

Sell Value Not Cost

"Customer needs have an unsettling way of not staying satisfied for very long."~Karl Albrecht

There is no question that sales are the heart and soul of a business. This is not to say that you should ignore profits, which are absolutely essential, but you will not have profits unless you produce revenue.

Part of my job is to refer clients of ours to other businesses that may be able to help them. We do not receive any commission or benefit for making the referral other than the knowledge that doing so will likely help both businesses.

Several clients were in need of web services, and I had worked previously with a very savvy web designer. He has many years experience in the business and is especially skilled at search engine optimization. The prices he charges are also very reasonable, so I thought he would be great for these clients.

I made the referrals, and in each case, the web designer prepared an estimate complete with a portfolio of his past work. After some time though, he had not heard back from any of them. With his blessing, I wrote a few of these potential customers to find out why they had not followed up with him.

When I heard back, every one of them said that they could not afford his services, though none of them said specifically that he was too expensive. They all said his quality was great and his fees were very reasonable but that they could not afford what he was offering.

After we had a chance to go through these responses, the reason he had not gotten any of these jobs became clear. He was only selling the cost, not the value or the benefits of his services. The customers were seeing his services only as a cost that offered very little improvement over what they already had.

The web designer had incorrectly assumed that potential customers already recognize the value of an improved website. We are now working with him to help develop a pitch that showcases this value. Instead of highlighting costs, his new sales approach will focus on the benefits of a new website to the customer’s business, including improved sales.

Now go out and make sure all your sales materials highlight the value your product or service brings. You can do this a number of ways. The key is conveying that value clearly and succinctly. One possibility is to quantify for the customer how your product or service can improve their bottom line. If it helps them increase sales by 1 percent, for example, that is so many more dollars going to their bottom line that will reduce the cost. Additionally, sometimes you can clearly show that by spending this money on a project you will incur significant cost savings. The point is that you must communicate value not costs.

You can do this.

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