What Does Value Actually Mean?
Tom Stimson
Helping Business Owners Achieve Intentional Success® | The #1 Executive Coach and Advisor in the AV Production Industry
When you’re deciding on which restaurant to go to for dinner, sitting down at a white tablecloth with a menu has a different value proposition than ordering food through a clown face at a drive-thru.
If you want to have a fine-dining experience, what else are you looking for besides good food?
One of the best Tex-Mex meals I ever ate was in a New Jersey hole-in-the-wall that sat five people. If I were thinking about the value of the dining experience, I never would have walked into that place. But I was just looking for a fast lunch. And of course because it had great food, it turned out to have much higher value than expected.
But 90% of people are looking for specific value. That little restaurant was capturing maybe 10% of the people who wanted to eat Mexican food for lunch, because they weren’t highlighting their superpower: really great food.
You have to know what your ideal customer is looking for in terms of value.
A lot of times we think we know. But often our own views on what’s valuable creep in without us noticing, and we end up framing value not in the customer’s terms, but in our own.
Once you understand that, you can start framing your value proposition in ways that have a tangible positive effect on not just the customer’s buying experience, but also on the overall outcome and profitability of the project.
Discover What the Customer Values
The first filter in finding value is the discovery call, or needs assessment. During that conversation, you find out whether the value the customer is asking for overlaps with the value you sell.
For example, you may get on a call and find a customer who just wants you to quote prices off the top of your head, take on a limitless scope of work, and commit to a budget on a project you don’t really understand.
That’s a great value-ask for the customer, but it’s a terrible one for you. The value-ask and the value-sell don’t overlap. So, you’ve just filtered out a wrong-fit customer whom you can thank and send on their way.
In your needs assessment, you’re generally going to find out what things are important to the buyer and the buyer’s constituents (their boss, the financial decision-makers, etc.). You find out what has value to them.
They might talk about timeline, fit and finish, confidence, convenience, or consistency. You’ll find out if their needs are urgent, or if they’re really dependent upon expertise. All these things should come out to varying degrees.
When it’s your turn to share, you start with a capabilities pitch where you talk about how your best customers use what you offer.
Your best customers, of course, use you for everything you do. This means you get to list all the things you do for your best customers, while acknowledging that an individual project may only need a subset of those capabilities.
Respond to What You Discover... in Their Terms
At this stage, the client might respond with, “Okay, great! Here’s what we need.” And different clients will tell you different things.
Example 1
Maybe they’ll start with an example of an event they did last year that they weren’t happy with. They tell you they’re coming to you early in the process so they don’t encounter the same problems again. They list the things that went wrong in an effort to avoid them.
“This and this weren’t ready,” the client says. “It cost more than we expected. We had some personality issues with some of the team. And then we didn’t know we were supposed to do certain things on our end.”
Then they tell you, “I think a lack of time is what caused some of the problems.”
As experts, you know there were probably other factors besides time. Maybe a misunderstanding between fit and finish, or the scope of work wasn’t clear. A lack of clarity in any area would have contributed to the problem.
So now you know where the value of what you offer lies. The customer said time, but practically it’s a combination of timeline, communication, and transparency. The client needs to understand exactly what they’re supposed to do and when.
Now, in your proposal back to the customer, you take those areas you’ve identified and use the customer’s terms to show how what you’ll do supports that specific value they’re looking for (in this case, time). By using their language and emphasizing what they value, you give customers the sense that you’re all on the same page and there won’t be any unnecessary surprises.
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For example, you might specify that your team is going to be working with the client long before they ever get on the job site, so everyone will be comfortable with each other and with the process when it’s event time. That’s where value is for that customer.
Be sure to emphasize those value points when pricing out the cost of everything from creative design to technical direction.
The value this customer is bringing to the table is time. They’re willing to devote more time to the project. The value you’re returning to them is using that time wisely, and showing them how you’ll do it.
Example 2
Another client might say, “We had a lot of trouble last year. We understand our budget wasn’t big enough for what we wanted to do, so we want to increase our budget. But we want to do it wisely.”
The value they’re bringing to the table is an increased budget and an expectation that things are going to cost more. The value you’ll bring back to them is making sure their money is well spent.
What you don’t want to respond with to a customer who’s concerned about budget is, “I’ve got a great idea for a giant curved LED wall!” That’s not an appropriate value response.
Your potential customer is bringing some value to the table, which you find out in discovery. Your response is to take that value and better meet their needs by providing even more value.
Of course, sometimes the value-ask of the customer is unreasonable, something like, “We spent a lot of money on a show last year we weren’t happy with. We want to cut the budget in half, but we’re asking for the same show.”
This is probably going to be a short conversation. Or, it could be an opportunity to see if you can retool the customer’s ask into something that can be reasonably met.
Discovery works both ways. The buyer is learning more about you, and you’re learning more about them. That doesn’t mean you have to take it all at face value. You can choose to go deeper into the relationship to better understand how to meet each other’s needs.
Example 3
A third customer might say, “We need a fresh idea. According to the feedback forms from attendees at last year’s event, nothing we did was surprising or delightful. They’d seen it all before. We need to step it up.”
That’s their value-ask. Your value-response? “Here’s the process we’ll use to find you a more delightful event.” And you’re going to sell them the process it takes to be innovative.
What you’re not going to do is sit there and share a litany of all the fresh ideas you can come up with. The ideas won’t be in context, they won’t be well vetted... and you just gave away all your ideas for free.
You’re also not going to talk to them about how much money you can save them or how great you can manage time. That’s not what they’re after.
Remember, what’s valuable to you may not be what’s valuable to your customer. And what’s valuable to Customer B may not be valuable to Customer A.
That’s why you have the discovery call and needs assessment. And that’s why you can’t have knee-jerk responses that try and sell everybody the same thing. You have to listen to the customer and tailor your response if you’re going to sell value.
What Components of Value Are Customers Looking For?
All the items below can be part of the customer’s ask. When they talk about these things in discovery, you can focus on them and mirror them back in your proposal.
Customers may talk about:
Listen for what the customer values and you’ll be able to meet them with the matching service you provide, framed in a way that they understand will meet their needs.