Value is in the eye of the beholder

by Jill Konrath

Are you creating value for your customers? Enough value? Unless you’re creating value every single time you’re with a customer, you’re vulnerable to being replaced by another supplier. One of the biggest challenges all sellers face is that we know our own products and services so well that we assume other people automatically understand us when we’re talking about them. Or, we assume that they interpret the words we use in exactly the same way we meant them.

Since your success depends on value creation, you must understand exactly what the term “value” means, and that can be a tough challenge since it’s entirely relative.

Value is in the eye of the beholder. Your customer decides whether something is of value to them, not you or your company. If they perceive something to be valuable, then it is.

Customers can be segmented into three different types, based on their perceptions of value. For some, the value is intrinsic to the product or service. For others, it’s in how the product is used, and for another group it’s in the strategic relationship between the two organizations.

Let’s take a more in-depth look at each of these value segments:

Commodity buyer
These buyers know exactly what they want and how to use it. They don’t need sellers to explain the details. 

Commodity buyers typically value:
• Low costs - They don’t want to pay any more than necessary. To be successful with these buyers, companies need to pull as many costs as they can out of their supply chain.
• No hassles - Make it simple, simple, simple to do business with your company. Give them an 800 number, send them a quick quote, or allow them to easily order on-line and they’re happy.

I’m a commodity buyer when I order things like contact lenses and office supplies. As a seller, there’s little you can do to create value except make it cheaper, simpler to order, delivered to my door and with easy returns if I need to send it back.

Strategic partner
These people are looking far beyond the scope of your products or services; they want a strategic partnership. They’re looking at how to best leverage their organization’s core competencies in combination with another company’s core competencies. 

These buyers value:
• Intimate and strategic relationships between multiple levels within both organizations.
• Mutual investments in joint projects.
• Merging of systems to accomplish more than either organization could do alone.

Working with strategic partner buyers requires a major corporate commitment and is far beyond the scope of any one seller. If your company isn’t capable or willing to do this, these buyers aren’t interested in working with you. By yourself, you can’t create the value they need.

"I need to make a sound decision” buyer
These buyers are either spending a lot of money on a decision or they don’t know everything there is to know about what they’re buying. Typically, their decision process is complex, involves multiple decision makers and takes place over an extended period of time.

With these buyers, sellers can create a great deal of value by what they personally bring to the relationship. 

These buyers value sellers who:
• Help them understand their problems in greater depth.
• Add additional insights into the challenges they face.
• Share relevant information regarding "best practices."
• Develop unique, innovative approaches to resolving their business issues.
• Keep them up-to-date on trends in the industry and how others are addressing them.
• Help them find ways around the obstacles they’re encountering, and
• Propose new ways to do more with the same investment.

These are just a few of the things these buyers value. But let me be even more specific. 

Here are some ways industrial supply distributors create value:
• Share ideas about what works and what doesn’t in the supply chain programs of other companies you support.
• Help them find ways to increase the turns on their existing inventory.
• Show them how to reduce their overall inventory costs while maintaining plant uptime.
• Let them know what their competitors are doing.
• Work collaboratively with related vendors to smooth out shipping and delivery problems.
• Help them establish important criteria for their vendor selection process.
• Suggest ways to improve the workflow between all companies and internal departments working on supply chain issues.

To be successful with the "I want to make a sound decision" buyers, you must bring more to the relationship than just your standard product or service. You must create value with each and every customer interaction.

If you do this, then even though your customer could buy your offering cheaper somewhere else, they will want to keep you around. Your ideas, insights, and knowledge are invaluable to them.

That’s what creating value is all about.

Jill Konrath helps salespeople win big contracts in the corporate market. For info on how to get your foot in the door, create urgent needs for your offering and developing profitable long-term relationships, visit www.SellingtoBigComanies.com.

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