One of the best ways to keep your prices high and still keep your customers is to offer more value than the cost of your products. But value is one of those grey areas that means different things to different people. How do you know what value to offer? How do you know what your value is? Here are some ways to find out.
It’s only value if your customer thinks it’s value.
You may think that some of your services are better than your competition and are a source of value. You may even think your product is superior and is a source of value. You may be thinking this if you find yourself saying, “We’re the number 1 seller of X in the marketplace.” Stop kidding yourself. It’s only value if your customer thinks it’s value. You’re definitely in trouble if the number 2 selling product would also work for your customer.
How do you know if you’re really delivering value? You start by asking your customer what your work or products have done for your customer or his bottom line. Ask how you’ve reduced costs, avoided costs or helped him make money. That would be a start to learn what is a source of value to your customer. What happens if he says that you haven’t helped his bottom line? Then you have another option to consider.
Some customers might not know.
You customer might not realize the value you offer. You might have to ask more specific questions to uncover how your work or product has impacted his company. You might ask how your work impacted his company cash flow. Any improvement is a source of value. Some employee compensation is tied to satisfaction scores of customers or employees. Did your work improve customer satisfaction? That could be another source of value so be sure to ask. You have to be specific about the questions you ask because some customers aren’t thinking of your products and your work and how it impacts their bottom line.
Be sure to remember to ask about time. Saving time is important to overworked employees today. Ask broader questions like “Has working with me made your work easier? Has it saved you time? Has it allowed you to be on time for deadlines?” Consider the time it takes to respond to problems and resolve them. When you are fast you get to take credit for that time savings. Also ask, “What have you been able to avoid now that you’re buying my products?”
When you reduce the number of products a customer buys he is often able to reduce inventory, free up space and save money as a result. Square footage has value when it can be used for more productive uses. He might not calculate that cost. Your job is to do the calculating for him.
Get credit for the work you did.
It’s very important to keep track of your work during the year. You might forget about the work that you did that contributed to value. I had a customer with a warranty claim when I was in the oil business. The equipment manufacturer denied the claim. I was surprised because I knew that the transmission my customer had should have performed beyond its premature failure. I spoke with our research department who worked extensively on equipment performance. I got performance data to give to my customer. He presented the data to the equipment manufacturer to prove his case. The manufacture then offered coverage of the failure he had previously denied. This saved my customer $30,000. That’s value that I was able to quantify and get credit for. My competition never got into this account even with cutting their prices.
Selling value is the only way to sell when you have difficult competition. Just be sure your customers appreciate your value. After all they’re the ones buying it.