She traded my diamond ring for some crackers: why value is contextual

One day when my daughter was 6 years old, she rummaged through my jewelry box (without my knowing). She spotted the shiniest object in there: a diamond ring I had received from an Italian boyfriend when I was living in Rome in my 20’s.

She loved it, but she had no idea of its monetary or sentimental value. So she decided to bring it to school (again, without my knowing). During recess, she and a few other girls had an impromptu bartering session. They each showed off the random items they had brought to school that day.

One of the girls pulled a packet of crackers out of her lunchbox. My daughter thought those crackers looked delicious. She had to have them. So she offered to trade my diamond ring for those crackers. The girl happily accepted the offer.

The next day I realized my ring was missing. I asked my daughter if she had seen it. So she told me the whole story. Needless to say, my heart sank. We searched the school and asked the girl and her parents, but the ring was gone.

The situation was so absurd, I couldn’t even be mad. But it does offer a huge lesson: value is contextual.

Why value is contextual

In the Gap Selling framework, we teach that the value of your solution is equal to the size of the Gap between the prospect’s current state and their desired future state. This means that the value is defined by the surrounding context, not the intrinsic value of the solution itself.

Boy was that true for my diamond ring. It had a lot of intrinsic value, but the context diminished its value to the satisfaction of a pack of crackers.

In sales, we tend to do the opposite. We focus a lot on the intrinsic value of a solution – so we talk to our prospects about features, functions, benefits, and price. But we neglect the contextual value of what that solution will do for the business.

A simple example: let’s say I sell house paint to contractors.

• If I sell it based on intrinsic value, I’ll tell my prospect that my paint dries quickly and only requires 1 coat of paint instead of 3. When the prospects points out that my paint is $3 more per gallon than other paints, I’ll try to overcome that objection by explaining that they won’t have to buy as much, and jobs will go quicker, and my paint is better quality. The prospect is interested, but he has a good team of painters who have their work dialed in. Why change?
• But if I sell based on contextual value, I learn from the contractor that he builds 15 houses per year, and that the paint job on each house takes 3 weeks and costs him $20,000 between labor and materials ($300k per year). I then calculate that by reducing the spend on labor by 66%, and the spend on materials by 45%, he could save $180k per year - plus have the capacity to do an additional remodel job at $400k because of the freed up labor. Now we’re talking about a nearly $600,000 Gap.
• Would you rather sell to a $600,000 Gap, or would you rather convince the contractor why the extra $3 per gallon is worth the quality and time savings? (It’s a rhetorical question, of course.)

Moral of the story

Value is contextual. Value is established when the prospect and seller agree on the desired outcome.

As for that diamond ring, I’ll never know where it ended up. Fortunately, I did have jewelry insurance so I ended up getting a nice pair of earrings to replace the ring.

And yes, I did have a serious talk with my daughter about the consequences of taking things without asking, and honesty, and the whole nine yards.

But I held off on lecturing her about contextual value. That can wait for now.

#b2bsales #discovery