Cost vs. value…

What do Christmas trees, the memory of my Dad, and selling value vs. cost have in common?  (Really Gary?  Slow day?) 

Well, let’s pretend you’re the salesperson and I’m your prospect.  If you were selling me the value of your product/service, what value statements would you make?  Go ahead - take a moment - jot a few down.  We’ll come back to them. 

One of my favorite, childhood memories was my Dad taking me to “shop” for a Christmas tree.  His definition of “shopping” was to stop at Christmas tree vendors until he found one willing to give him one for free.  It would be a tree with broken limbs; cast aside; unsellable.  He’d also ask for miscellaneous branches laying about.  The vendors never asked why he wanted one for free.  Perhaps they were just happy to get rid of the scraps.  No value.  (My Mom would have been embarrassed!) 

Back home, using a drill and green string, my Dad would “rebuild” those broken, unsellable tree-parts into a work of beauty.  Ornaments and tinsel would hide the strings holding the whole thing together.  (My Mom was always uneasy when visitors got too close to our tree.) 

My Dad was a “Depression-Era Baby”; very cost-conscious.  No matter how hard the salesman tried to sell him the value of another, beautiful tree, my Dad would hold out.  The fact-of-the-matter was my Dad could afford a full-price tree.  His value lied elsewhere.   He searched by price because (A) he enjoyed the “hunt”; (B) he wanted to introduce me to business transactions; and (C) he took pride in the challenge of assembling a beautiful tree from various, discarded components. 

Fast-forward.  Today, I enjoy working with salespeople who face the selling challenge of cost vs value.  There are many reasons for this challenge.  Generally, I believe value is vague; varies by person; and very hard to quantify.  Consequently, prospects gravitate towards cost.  Cost is specific; objective; and doesn’t vary by person (without negotiating a big discount, of course). 

Salespeople inadvertently reinforce this gravitational pull.  Tools like “TCO” (Total Cost of Ownership) or “ROI” (Return on Investment) calculators make the situation worse.  Guess what these vendor-developed calculators draw the prospect’s attention to?  Two minutes from Victor Antonio:

Victor’s “The Value Equation” almost looks too good to be true, true?  And that’s the problem… this isn’t the prospect’s first rodeo.  The prospect knows exactly how to make the ROI look even better – reduce the denominator! 

Nowadays, we live in an era of affluence.  Nonetheless, no one wants to pay high prices – perhaps that’s why prospects pit salespeople against one another to earn their business.  Do you compete on price?  Your prospects hopes so: 

The Law of the Marketplace: 

If only one price can be obtained for any quotation, the price will be unreasonable. 

Unknown Sage 

Still, who doesn’t enjoy getting a deal? 

            It's not the cheaper things

that we want to possess

But expensive things

that cost a little less.                       

Rolf B. White 

Every time I see a prospect wanting an expensive thing for “a little less”, I smile.  I remember my Dad and our Christmas trees.  (I also know why my Mom never joined us.  She would have valued the full-price tree.) 

OK then, those value statements I asked you to jot down above...  it was actually a trick question.  In the real world, only your prospects can define their value.  The key question is, are you asking them? 

GAP 

When life gets tough we could get a helmet… or… we could leverage the peace and share the power of a positive perspective.