Selling is communicating value

My good friend Petri Matero has credited me several times for originating this one-liner. So let’s dive deeper into what it means “to communicate value” as a salesperson or an organization.

It’s often said that the actual act or process of selling is creating value. That’s not true. A sales process might create value for customers when you reframe and clarify the customer's problem/need, but that is only minor. The actual value is created when the solution (that a salesperson is selling) is delivered and the customer gets the benefits. Hence, selling communicates the future value that the solution delivery will create.

To communicate value, you must know what value means to your customer. It can be, e.g., creating more income, decreasing cost, reaching a personal target, keeping a KPI, and increasing customer satisfaction. Secondly, you need to know how your customer is measuring the value. E.g., by number, KPI, cost, revenue, NPS. Remember to keep a tight customer focus: you need to know from their point of view what value means: both on a personal and company level. Also, remember to check the emotional and logical value: e.g., emotional value can be a sense of security while logical value is pure numbers.

There are more aspects to communicating value, so let’s go through some key concepts.

Value promise. This is the promise a salesperson makes about the future value the customer will get when purchasing what is being sold.

?Perceived value. This is the value that customer perceives they will get. Note that if sales communicate effectively, this should be the same as the value promise. Typically it is not, and the effectiveness of the salesperson’s ability to community defines the difference between what they think is communicated vs. what the customer understands.

?Realized value. This is the actual value that the customer will get when the solution is delivered to the customer and put into use. Optimally this would be the same as the perceived value that the customer understood during the sales process.

?Value gap. This is the gap between realized value and perceived value.

?Value-based pricing. This means the pricing is based on the value promise / perceived value from the customer point-of-view instead of, e.g., cost-based pricing or competition-based pricing. Ultimately a value-based price could be a percentage of the realized value.

?Price to value ratio. This is a price-to-value ratio communicated to the customer. E.g., you get a benefit of 100 units for the cost of 10 units.

?Brand value. This can be either the brand value of the solution, delivering company, or even the salesperson. On the other hand, it can be the customer's brand value, which means they are a valuable reference for the seller.

?These are the concepts that I use myself when I am talking about communicating value. I might have invented some myself and picked up the rest. How does it resonate with you, and how are you communicating value in your (sales)work?

If you have any other sales concepts that you would like me to open, please suggest them.

Thanks for your attention.