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Understanding Why Value Is King

Of course you didn’t set out to sell a commodity, but if your prospects don’t see a significant difference between you and your competitors other than price, you may as well be selling sugar, wheat, or pork bellies. Many salespeople put together beautiful, interesting presentations only to end up competing on price because they failed to establish value.

The competitive environment for most products has increased dramatically. Name a feature and your competitor either has it or soon will have it. Like designer handbags, a perpetual flow of look-alikes is poised to go after your customers. Even though these competitors may not offer the same quality, benefits, or service as you, you must acknowledge their existence and find a way to establish preference with your prospect. After all, if your competitor can offer the same value for less money, you won’t win the business. In order to avoid the shifting loyalty and competitive price wars that are the unfortunate companions of selling a commodity, your presentation needs to deliver a strong, clear value message that resonates with your prospect and deliver it at strategic points throughout your presentation.

The meaning of value shifts over time so it’s important to understand what makes value important in today’s economy and how to make a clear distinction between value, features, and benefits.

Grasping what makes value important

Value, the importance, worth, or usefulness of something, isn’t a new concept. However, in the past decade it has become front and center in the sales spotlight for the following reasons:

• Multiple choices: The days of having the only game in town are long gone for most companies and salespeople. Even new product innovations and service categories often only enjoy a brief honeymoon period before finding themselves facing renewed competition.

• Similar features: Although your product or service certainly has some unique qualities, often many variations of the same feature are available — or soon will be available — in the market that can also provide a solution to your prospect’s challenge or help them achieve his goals.

• Feature overload: Especially with complex products, the sheer number of features to compare when evaluating a solution can overwhelm even the most hearty prospect and cause decision fatigue, a proven condition which can result in irrational or unpredictable buying behavior due to the depletion of willpower.

• Similar messaging: Maybe your product is completely unique, but the competition has done a good job of positioning its product in a way that makes it look or sound similar to yours, thus effectively blurring the lines of distinction in your prospect’s eyes. Ultimately, value isn’t about reality, but about your customer’s perception of reality.

Understanding the difference between features, benefits, and value

You’ve managed to communicate some value in order to secure a presentation, but be assured your competitor has - and will - be tightening its focus on value as well. You now need to step up your understanding of value in order to use it to your full advantage.

In considering value, salespeople can easily get lost focusing on the many features of their product or service, assuming the benefits are obvious to their prospect. Or, alternatively, they talk about benefits and assume that they’ve done a sufficient job of conveying value. These common mistakes end up being very costly as they leave the interpretation of the value of the solution completely in the prospect’s hands. Having a clear understanding of how features, benefits, and value differ is important.

Features

A feature is simply an attribute or fact about your product, service, or company. As with most facts, a feature has no intrinsic value. Although the benefit may be obvious to you, it may not be obvious to your prospect, and, in fact, he may have an entirely different interpretation of what the benefit of a particular feature is. For example, if I state, “Our company has 15,000 employees around the globe,” that is a feature - a fact about my company. Now I may think the benefit is obvious: the prospect will have 24/7 access to personal service. But the prospect may think it means he is going to be a small fish in a big pond and miss that personal touch that is important to him.

An example of a feature: The car is fuel efficient and gets 50 mpg on the highway and 40 mpg in the city.

Never leave it up to your prospect to decide what the benefit of a feature is. Always associate a benefit with a feature.

Benefits

A benefit is not what you sell (your product or service) or how it works (features). A benefit is how that feature helps your prospect. Benefits are usually expressed in terms of loss or gain (for example, increasing sales, revenue, or profits or reducing time, cost, or effort), and are best when they’re quantifiable. Benefits are typically stated after a feature and answer the question on your prospect’s mind: What’s in it for me – or WIFM?

An example of a benefit: The car is fuel efficient (WIFM?), which means that you’ll save up to $20 per visit to the gas station.

Value

Value extends beyond what your product or service can do for your prospect and aligns your benefits with the prospect’s larger goals and objectives.

An example of value: The fuel-efficient car allows you to reduce overall travel expenses by 20 percent and aligns with your goal of reducing your carbon footprint by 5 percent year-over-year.

You may have similar features and benefits in each of your presentations; however, the value will likely be different for each individual prospect because it’s specific to each prospect’s objectives. Discover more about features and benefits as you go along.