In a previous post I noted that customers associate value with that which they pay for. That means, in my opinion, that if you give a customer something for free, the customer will not really recognize it as valued. I would like to address the concept of customer value, when it comes to sales. I will relate a story to illustrate my point.
Several years ago I was dealing with a customer users group. As with every good users group they were in the habit of prioritizing their product enhancement desires and requests and presenting those requests to us at our joint user’s group meetings (which actually occurred twice a year). A specific request for a specific enhancement started to appear regularly at these meetings.
As time passed and other issues were dealt with, this request continued to rise in priority on the request list.
Soon it became a point of contention. The customers wanted to know why the feature was not being made available (despite the availability of “work arounds”), and the sales teams wanted to know when they would be able to sell the capability to the obviously pent up demand.
It became time to deal with this topic directly. During an open forum meeting with the users group, they were asked how many of them wanted this capability, even though there was a work around. All hands were raised. They were then asked how many of them would be willing to pay for this capability, since incremental development and work would need to be expended by the manufacturer to create it.
Despite the popular concept to the contrary, we were in fact a “For Profit” institution.
Several hands went down. When it was shared with them what the actual price of the capability would be, to cover costs and provide profit and on going support, almost every hand dropped.
There are always those things that are “nice to have”. Those are normal items that customers do not associate value with. If they did, they would probably be categorized as “need to have” instead of “nice to have”. Need to have items can, should and normally will be paid for by the customer in association with the value they bring the customer. Items that are classified more as “wants” instead of “needs” may not.
The quickest way to separate the “wants” from the “needs” is to associate a price with the request. If the customer recognizes the value, there will be a negotiation / agreement. If the customer doesn’t recognize value, you will know very quickly and can then move on to the next topic.
Many people are taught that it is not polite to speak about money. However in the case of business, money is essential. I suggest you bring it up early and often in the sales process. The sooner the customer is comfortable with the idea that there is a cost involved the sooner you can concentrate on the benefits. Most people do it backwards. It is important to qualify your client before the sales process begins. If you know they are willing to buy then you know you can possibly sell them something. Would you be willing to spend $20 on a book with information that had the potential to double your business this year? You get the idea.