Sell at the Highest Level of Value

Here’s something to think about: Where is the highest level of value in what you sell?

When a customer wants to rent a tripod screen or a flip chart — very inexpensive items — and have it delivered, what’s worth the most to them: the flip chart or the delivery?

If you answered delivery, then you’re thinking from a client’s perspective of value.

The customer needs the product, yes. But they can get that product from lots of different places. It’s going to be pretty much the same product regardless of where it comes from.

What they really need is a company who will deliver that equipment at a specific time, help them set it up, and help them integrate it into their environment. That’s where the most value is created.

Many businesses struggle with this thought, a struggle that manifests in reducing the price of delivery so that it’s less than the cost of the product they’re delivering. To them, the value is in the tangible product.

But that’s because they’re not thinking how their client thinks.

Don’t Leave Value on the Table: An Example

One of my clients happened to be located next to a major downtown area, and much of their rental work involved small deliveries and small rental setups in high rises and office towers.

What they were charging for delivery was ridiculously low when you consider the value of those deliveries to the customers. Without delivery, customers would have to:

• Go get their vehicle out of a parking garage
• Navigate their way out of downtown
• Come to an office to pick up the product
• Drive back and park
• Drag the product into the building and up an elevator
• Set it up themselves

Delivery was extremely valuable to customers. When we calculated what delivery to the 27th floor of an office building was actually worth, we found it should cost $300. My client was charging $35.

Consider the Hierarchy of Value

My client and I had a discussion about the hierarchy of delivery value. Delivery has two elements: location and time.

Location is where you can deliver the product: to the loading dock, the lobby, a specific floor, or a specific office.

Time is when you can deliver the product: at any time on a given day, within in a two-hour window, or at a specific moment.

That’s your value matrix. And if you can determine what’s important to your customer and meet those needs, the price of the rental is going to be irrelevant. This is what selling at the highest level of value is all about.

In this situation, the proposal would lead with the delivery. The rental itself would be down at the bottom.

Underselling and Over-Delivering Revisited

The story above is a simple example of underselling and over-delivering, one that I still run into just about every week. Once a company has created this internal mindset, it permeates everything they do. It creeps into all their value perceptions about the products and services they offer.

It creates a culture where part of your value proposition is that you over-deliver — which is just the other side of the coin from underselling.

You end up assigning a price to something that means a lot more internally than it does externally. This is what leads to over-delivery.

So when you tell a customer, “I’m going to do this,” it really means, “I’m going to do this plus a whole lot of other things.” But you don’t specifically sell all those additional things, and you don’t assign them to the price.

You want to surprise the customer. You want to delight them. The downside is that if you didn’t factor the extras into your actual cost of doing business, then you’re giving up margins.

When I ask clients whether they’ve actually looked at what it costs to carry out their over-delivery — and then pricing based on actual costs — I often hear, “Oh no, we can’t do that! The customers won’t pay that much!” In other words, they’re prepared to give the customer something for nothing.

When this happens, the customer perceives that they have control. They can be demanding. They can always ask for more. You’ve given up your control of the scope of work.

This is when “surprise and delight” goes too far.

Sell From the Customer’s Perception of Value

So what should you do instead?

It’s important to understand your costs and what it’s going to take to deliver the scope of work. Then, it’s important to apply margin to that and live within that scope.

But when it comes to selling, you don’t sell the scope of work. The scope of work is a tool. Instead, you sell from the customer’s perception of value, which is hierarchical.

When customers are looking at whether or not they want to hire you to do a project, they’re going to ask some questions in order of importance:

• Outputs — Will hiring you meet the needs of the project?
• Quality — Are you going to do good-quality work?
• Attention — Will you give me the attention that I need in this project?
• People — Are you going to include specific people if that’s important to me?
• Time — Will you make good use of my time?
• Convenience — Are you going to be convenient?
• Flexibility — Will there be room for creativity and changes?
• Price and Terms — What is the price and what are the terms?
• Tools — What are the tools you’ll use to get it done?

When you’re selling based on perception of value, you’ll want to sell to the best buyer as much as possible. To do so, look for the three components of customer buying styles: confidence, value, and control.

1. The most valuable buying trait is confidence. A confidence buyer thinks you’re the expert and wants you to be the expert. If we look at the hierarchy of client values, output, quality, and attention are all about confidence.
2. A value customer is looking for bang for their buck. People, time, convenience, and flexibility are about value to them.
3. A control customer considers themselves the expert. They see themselves as the ones in control of the relationship. Price, terms, and tools are control techniques the customer leverages against you.

If you lead with price and tools in your proposal, you’re selling at your lowest point of value, and you’re inviting the customer to be the lowest denominator of buyer.

Instead, sell like you’re selling to a confidence customer. Meet the needs and expectations of a value customer. Be wary of the control customer who’s bypassing the higher-value qualities of your offer.

Practical Application

Let’s apply the value hierarchy above to selling an actual live event.

When putting together a proposal, remember that the order in which you present the proposal is important. Use the knowledge you have about the buyer’s values and their ability to ascertain value to deliver the value they’re looking for.

If you’re selling a project that includes event design, lead with event design. Everything emanates from event design, so it’s the highest order of value. In this case, that sounds like, “We’re going to design an event that’s so solid and so cool that you’ll absolutely want to hire us.”

If the event is already designed and you’re selling from content creation, then lead with content creation. Content creation comes next in order of value because content creation is the fulfillment of event design.

If the client already has the event design and content in hand, then you’re selling from the execution level, which is event management. Many in the production rental audience assume that rental plus labor is where value is created, but it’s not. It’s in event management — the producers, technical directors, and all the rest needed to make sure an event goes off well.

Last, you would present the actual event execution — the services and products involved in carrying out the event. Without all of the above, event execution doesn’t have much value.

Educate the Customer

The average customer who doesn’t understand how all this works might expect you to lead with products and services. But they need to understand that event design, content creation, and event management are higher orders of value that they should pay attention to.

Remember that anyone can shop or sell on price. Buying and selling value takes effort, but both sides win.

It’s your job to highlight the value and importance of design, content, and management — because they are more valuable.