What Is Value?

I hear over and over again about how sales people are not able to sell the value they have versus the competition. You know how it goes, “I couldn’t get the deal because my competition’s price was so much lower than mine that I just couldn’t compete.” Capturing value seems to be one of the hardest things sales people have to do. Understanding value and what knowing what creates value is the starting point to competing effectively against your competition.

Value is a perception. You’ve heard the saying: “one man’s trash is another man’s treasure.” Value is in the eye of the beholder. So if you think your product or service inherently has value, you are mistaken. It only has value to someone who recognizes and appreciates the value. A good definition from a sales perspective is: value is perceived benefit minus perceived cost. So what shapes the perception of value?

Perceived value is determined by scarcity. Gold is valuable not because of its chemical composition but because it is scarce. You just can’t walk down the street and pick up a gold nugget or two. If you could, gold wouldn’t be valuable. Therefore, if you want to increase the value of your product or service, you have to show how it is unique. There are many ways to create a unique value proposition. You must understand the competitive alternatives available to your prospect. Then you can determine what makes your solution unique. Don’t overlook small things that you may think are not be important. It could be the smallest thing that creates the most value.

Creating value begins with understanding value. Unless you can show the uniqueness on each sale, you will always fall into the trap of having to focus on price. After all, if everything else is equal, the only thing left to compare is price. Always create the situation where your prospect is comparing an apple and a grape.

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