Ever wonder why people tell you they cannot afford health insurance while you are sitting there watching the game on their massive flat screen television? Or why people pay a premium price to live inside a gated community that is inside a gated community? Or why you drive by a beat up old trailer with a Porsche sitting outside? Why? Well the answer is simple: because people desire, buy and pay well for what they perceive has value.
Value is benefit/price. The more benefit something has to an individual, the more they are willing to pay for it. Understand that simple rule, and you set yourself up to win in the Trust & Value Economy. When you understand and deliver the value your target market is looking for, and then create and deliver the value they do not even know they want, you will stop competing on price and start beating out your competition.
Remember the controversy over the US Olympic Team and their uniforms? How upset our politicians and the American people were at Ralph Lauren and the US Olympic officials for having their uniforms made overseas! I had to laugh. I mean, why were people upset? It made total sense. It was simple. Ralph Lauren and the US Olympic team had those uniforms made overseas because they did not see the value, as it related to the price, of having them made in the US by US companies. Now that is not the fault of Ralph Lauren and the US Olympic officials; it is the fault of the sales people for the US factories.
Say what? Yes, you heard me. Those uniforms were made overseas for one reason and one reason only: because the sales teams for the US factories and workers did not sell value. And I would argue they did not sell value because they had no idea what their value was. They were unable to articulate what the US Olympic team would gain if they had their uniforms made here in the US. Instead, they defaulted, whether they realized it or not, to selling price, because they had no idea how to sell value.
If your customers leave you over price, it is because price is all that you are selling. If your prospects choose your competitors due to price, it is because price is all you are selling. Do you know, can you tell me, what exactly your customers gain from doing business with you over your competitors? Do you know what your prospects would lose if they chose your competitors? And if I asked your customers and your prospects those same questions, would they have the same answers as you? If not, you are not selling value, you are selling price.
To sell value you have to:
- Know what your value is. You have to have a clear understanding of what exactly is most important to your target market, and make sure that you are in a position to deliver it. What is it that they want so much, what is so important to them, that they are willing to pay for it?
- Next you have to ensure that how, when and at what level of commitment you deliver that value is conveyed in every single communication, conversation and messaging you have with your clients. They need to understand the value you are delivering. Never, never assume that they do.
- Once you have delivered the basics, you need to take it to the next level. You need to WOW the customer and help them see the value you deliver beyond their expectations. You need to create new desires in them; new ideas of what your product, service and company can do for them.
- Lastly, you need to ensure that every single member of your team speaks the language of value.
So understand: if you are still struggling to compete with your closest competitors and those bidding wars often come down to price, then you need to rethink your target market, and you need to question whether you know and understand your value. Welcome to the Trust & Value Economy, where price is only the deciding factor when you are not giving your clients anything else to choose.