Companies throw buzz words around like pillows at a preteen sleep over. Value Proposition, value marketing, cost benefit, cost justification, value chain – you’ve heard them. Too many are adopted by company leaders to create the internal “vision” of what the company must focus on in their corporate culture and sales and marketing efforts.
All those fancy buzz words about delivering value are often slightly hypocritical. Look at this startling statistic: less than 3% of middle market companies invest in disciplined, scientific customer research to learn what their customers truly value. Too often they think they know. They also mistake customer satisfaction surveys for research. In twenty years of research, four companies out of over 300 correctly anticipated their customers’ top three buying criteria for value.
It’s no small wonder that many companies lament that price pressure has challenged their margins. C- suite struggles with salespeople wanting to meet their sales quotas by caving in on price. The “path of least resistance” is used when there are no real discernible competitive advantages. One cannot have a competitive advantage if they don’t know what is most valued and if they don’t measure what is most important– 85% of companies don’t measure what their customers value. Furthermore, 98% of companies have little or no internal agreement on what sets them apart. These murky waters cause companies to leave lots of business on the table. Or default to competing on price.
When I tell business owners that our research has proven that price is NOT the top criterion for most buyers, they refuse to believe it. All of us will pay for value when we see it, but too few salespeople are armed with metrics that build their value story. If management has not provided salespeople with relevant sales messages, then it is understandable the default is to be closing sales with price. It may be the only differentiator. It never should be!
If you truly want your mission and culture to be about value and engage in value marketing/sales, then what has management provided the front line with that sets you apart? What metrics do you have to provide proof that your company is better than the competition in areas most valued in the buying decision? Most importantly, do you know beyond a reasonable doubt what your customers and prospects want most, or is your vision just buzz words?