Join me as we journey back in time to our high school English Lit class. We are reading William Shakespeare’s Richard the Third. It seems as though good King Richard was in a tough spot. Consequently, his perception of value had just taken a right turn. Just days before – he had castles, Knights, Lords, Ladies (in Waiting) and a pile of gold the size of Buckingham Palace. Suddenly his value perception changed. Instantly, Richie placed paramount value on a fast mount and a short head start.
We’re in a Recession – hopefully it’s not a secret. Your customers, just like King Richard, find themselves at the business end of a double-edged sword. Business is tracking downward and the banker is squeezing. Wouldn’t it make sense that their perception of value might have changed too? Sales Managers must help their teams redefine their approach to customer value – quickly.
If you are a purely price driven commodity sales organization, you are probably already looking for new and innovative ways to trim costs from your operation. But for the knowledge-based distributors who sell that “fairy dust” called “value”, it’s time to change perceptions. Oh, the worth of what you do remains the same – “kinda”. Ultimately, elimination of scrap has a measurable value. So to does increased productivity. But just like good King Richard, the customer’s need for something basic may overshadow the other value.
During times of economic expansion customers place highest value on the ideas you present which drives growth. For example, if your idea allows them to increase the outflow of products by 4-5% – you have contributed great value. But as the fluctuation trends downward, things change. The highest value shifts from growth to cost reduction and spend avoidance. Further, customers become very adverse to risk. Walk a mile in their shoes, even a small mistake during a recession can be career and/or company threatening.
If you will please note, I said they place the highest value. It doesn’t mean the other things loose their value, but the value changes. Let me switch forward 500 or so years to illustrate this point with a tale from America’s past. Families in covered wagons trekked across the great wilderness with all their worldly possessions loaded aboard. When the mountains turned to desert they were faced with a choice – grandma’s piano or a couple extra barrels of water. And, while that fine musical instrument still had value – for the next 300 miles water shifted to a higher value. Today’s economic situation has put some companies into a similar mode with cash flow. They want to hold on to more of it for longer periods. Align your value statement with this thought and the force of nature work with you.
Now here’s the rub. All too many distributor organizations have taken a circle the wagon approach (pardon the continuation of my Conestoga analogy). They push their sales team to do more of the same. First, they hesitated to teach their team how to measure and record real value. Now, they continue forward pushing the same products with increasingly poor results. And, they chalk it up to the economy.
Let me implore you. Take time at your sales meetings to discuss value – customer value. Not just value as some obscure term. Discuss value in the most meaningful of terms – that 5,000 year old metric of value – Money. The companies who use these times to build, measure and report back the value they provide will be the winners when things get back to normal.
Before I sign off
If you assume your customer contacts already understand your value, you are terribly mistaken. Report after report (from the folks who track your customers) indicate, your customer’s management team has the same problem you do: their people don’t understand financial drivers. Your company’s sales team needs to lead the way and help customers connect the dots.
