Do you Sell Value?
What’s your value proposition?
And can your staff explain this to your customers?
Price and Profit Erosion
One of the signs around recession is the erosion of price. Organisations can fall into the trap of believing that most of their customers want a cheap price.
This is a strong perception that when it takes hold begins to destroy the value proposition of a business. The more staff believe price is the only major requirement the less able they are to hold customer discussions about value.
What is value?
One way of assessing value is by combining aspects such as
- Price (both high and low)
We know that in some circumstances a too low price destroys the perception of quality that stops a customer purchase.
So a combination of these five offer clues as to how to describe your value proposition. Here’s an example
Customers in the insurance industry will pay as much as £100 more for their cover if they believe any claims made will be handled personally, without pain, stress and inefficiency.
So in conversation with a potential customer i might ask them, “Apart from a competitive price, why are you looking to leave your current provider”?
If they say, “i made a claim and it was a nightmare getting things sorted. Getting through to the call centre was a joke and no one would take responsibility for sorting it quickly”.
This response would allow me to use language that reflects my organisations value proposition. Perhaps something like,
“Here at Glenn Insurance you deal with one team for everything. You can contact us direct, with no call centre queues, visit us personally face to face and by email if you prefer. We are different from an online, call centre business where its easy to get lost in their systems2.
Being able to confidently describe your value proposition means that staff don’t need to sell on the cheapest price, even when many customers say they want one.
Value is a Perception and Perceptions Change
Psychologically speaking, humans don’t like pain and so if you sell products and services that take away a customers pain customer will automatically buy. The deeper the pain you take a way the more they will pay.
Wanting a low price is often the customers opening gambit but the clever advisor will tease out the pain they want to avoid and connect this to their value proposition.
This gets beyond the perception of cheap being king.
For free advice on fine tuning your value proposition and helping staff to articulate it to customers so they spend more contact me at email@example.com