Value Propositions, Closing & Negotiation For Sales People

VALUE PROPOSITIONS

Once we understand the importance of asking the right questions we can start the process of finding out what our clients needs are.

This is when we – offer them a solution (benefit that they will gain through purchasing our product or using our service over that of our competitors to ease their pain.

 

Value Propositions are:

 

A clear statement of the tangible business outcomes that a customer gets from using your product, service or solutions.

 

The very best value propositions are customer-centric and include numbers that talk to your customer’s business.  A good value proposition has three elements: business driver; change; metrics.

 

"Outsourcing IT infrastructure (business driver) can reduce costs (change) by 20% (metric)”.

 

x      Value propositions are expressed in numbers

x     What’s the client’s time expectation?

x      No guessing and no assumption

x      Value propositions use the client’s numbers not yours

x      A strong client value proposition should include as many as possible of:

 

Increased profitability, Increased revenues, Improved cash flow, Reduced costs – this can include costs reduced or eliminated and costs avoided

        Other qualitative benefits – increase in customer satisfaction, market share.

        Return on investment should be the summary of your value proposition

        A strong value proposition enables you to hold pricing better

 

Value propositions are expressed in numbers

 

A good value proposition will be able to project actual numbers that will result when the client follows the course of action you’re proposing. 

The whole point of the questioning phase of your sales campaign is to dig down into the client’s business to understand what’s going on in their organisation and the financial impacts resulting.

As you question, you’re looking for things you can measure.  They can be a host of things – but the most common by far are profitability, revenues and costs.  When you’ve found your problem, you need to understand what the metrics are now and what the client thinks they could be if the problem you’re talking about were to be resolved.

The second stage is as important as the first.  You need the client’s view of “What is it now” and if the problem were to be solved, “What could it be?”

 

What’s the client’s time span?

 

An important dimension of this is to gain an understanding of the client’s time frame.  Do they think in terms of this year, a three year plan, or something else?

The reason for this is you need to be able to state your value proposition over a time frame that’s meaningful to them.  If you talk about value over five years and their furthest horizon is three years, you’ve a problem.

As you work through your notes from your client meeting and start building what your value proposition might look like, it’s almost certain you’ll find gaps in your knowledge. When that happens, it’s very tempting to make some assumptions or even to guess at what the missing data might be. The moment you do that, you’ve destroyed the credibility of your value proposition.  The far better approach is to pick up the phone to the client and ask.  Assuming you’ve had a reasonable meeting that got you to some figures, why wouldn’t they want to help you make the financial arguments better and more robust?

 

Value propositions use the client’s numbers not yours

 

As you are originally gathering your data with your client, be sure to summarise it and get the client’s agreement at the time.  Then when you send an email summarising the meeting, include whatever metrics you discussed and agreed. This is critical.  You need the client to recognise their numbers in the value proposition you ultimately present.  If they feel you’ve made the numbers up, it’s your value proposition and it’s worthless.  If they feel the numbers are theirs, then it becomes their value proposition and that’s a good place to be.

The final part of your value proposition should join up the financial benefits you have identified with the investment required to purchase your solution to show the return on investment.

Taken as a whole, your value proposition becomes the financial summary of the customer’s problem, the benefits they agree they’ll get, the investment required to solve the problem and the return they’ll get by doing so.

That summary is of course perfect for the executive summary in your sales proposal or presentation.

 

A strong value proposition enables you to hold pricing better

 

A strong value proposition the client agrees with is probably the strongest tool you can have to win more sales.

But there’s a very important secondary benefit.  Every significant sale will go through a phase when the client will want to negotiate the price.  If you enter this phase of the sale with a totally compelling value proposition, the pressure to discount is usually significantly reduced.

 

CLOSING

 

After the value proposition we have to ask for the business.

 

If you do decide to award the contract to (our company) how long would it take to get all the approvals and the signatures on the contract?’

 

 or


’If you do award the contract to us, when would you notify the existing company?’

 

Yes Staircase:

 

‘So if we can reduce your ……….. in …………….. which is currently at a cost of this………………. With the product/service I have described to you then you will be happy to move forward/go ahead with a purchase?’

 

Buying close:

 

‘So what would be the next step in your buying process to move closer to a decision being made on the installation of the ……………………?’

 

Summary Close :

 

‘So if you take this and this you also get the free warranty I talked about and in service training. , That comes to €710 please. How would you like to pay?’

 

Assumptive Close:

 

‘Ten boxes or twenty?’

‘Tuesday or Thursday delivery?’

 

Negotiation

 

1. Find compromises that are reasonable and commercially acceptable

2. Develop outcomes that increase value for both the customer and you

3. Apply a negotiation process built on collaboration and trust

 

Bottom Line

Every € $ or £ goes straight to the bottom line

 

Bargaining

Recognise bargaining means you’re in a good place

Just because someone is bargaining does not mean you have to give.

They ask for something then you ask for something in return

To negotiate with something, it has to have value to the buyer

‘Great quality’ or ‘Amazing service’ are abstract and have no value

 

Your challenge :

 

Make the pie bigger

Bring more factors to the discussion beyond price

Convenience, speed, and many other factors can have value

 

Solution Value & Risk

Look for mismatches between cost and value

Think about risks

 

What Else Has Value?

Look for low cost to you but high value to the customer

 

Listen

Don’t assume knowledge on their part

Deal with the easy points first

No might mean not now

Continue to peel the onion even in the negotiation stage to understand No or not now and the reasons behind it.

 

 

 

 

 

Daxi Business Awards - January 28th 2015.

Celebrating the success of businesses, charities and individuals in Eastern Cyprus. Over 800 people attended this event! Next Awards scheduled for January 2017.

Daxi Business Awards - January 28th 2015

 

Eastern Cyprus Daxi Business Awards 2014

Video Above - Highlights Video from The 2012 Daxi Business Awards.

 

The Daxi Business Awards were founded in 2011 as a way of giving recognition to small to medium size businesses originally in the Famagusta region.

 

After two successful awards events, the scheme has now been extended to include businesses from the Larnaca region also, bringing together the people & businesses of the Eastern Cyprus community. This promises to be the biggest Awards event ever seen in Cyprus!

 

Initially the public will have the opportunity to nominate businesses for various categories who they feel are worthy of recognition in relation to each award criteria. Any legitimate business within Eastern Cyprus can be nominated whether they have many staff or are a ‘one man band’. Businesses DO NOT have to be Daxi advertisers or have any business relationship with a panel member to be eligible for nomination, this is purely the choice of the general public.

 

A panel of experts will then research all nominated companies in relation to their various award categories & each business will have a one to one interview on their premises with a member of the Business Awards Panel.

 

Panel members are selected for their knowledge experience & expertise in dealing with a large variety of businesses in various fields. Where possible panel members will interview businesses they have little or no knowledge of to give an impartial view on each business & their eligibility for the award. This years panel will be announced over the coming weeks.

 

The panel will meet after all interviews & research has been carried out to discuss each award category, the nominees & the results & findings. The panel will then debate each award until a unanimous decision is made in relation to the winner of each category. All category winners will receive a hand made Award & a framed certificate. Business Of The year will receive over €3,000 worth of business prizes including €2,000 advertising in Daxi Magazine, €700 cash & 1 Years Gold advertising membership on Cyprus Eastern Forum. The winner of the Outstanding Contribution To The Community Award will receive a €500 donation towards their charity or organisation from Daxi Magazine.

 

The winners are then a closely guarded secret of the panel until the awards evening itself. This year the Eastern Cyprus Daxi Business Awards will be held on 31st January 2015 at The Zappion Palace in Paralimni. A bus service will be arranged for those traveling from the Larnaca area.

 

Nominated businesses along with groups, associations & members of the general public are able to purchase tickets & join in with this prestigious event, designed to bring a community together in celebration of the businesses & non profit organisations within the Eastern Cyprus region.

 

This years categories are as follows:

 

Best Newcomer - For businesses aged 12 - 24 months at the time of nomination.

Innovation - For businesses demonstrating innovation in their products &/or services

Outstanding Customer Service - For those businesses that have gone over & above for their customers.

Outstanding Achievement - For businesses 24 months old or over who have demonstrated Outstanding Achievement.

Employer Of The Year - Ideally nominated by their employees for demonstrating outstanding commitment to training, working conditions & rewards & recognition structure towards their employees.

Lifetime Achievement Award - For companies established 20 Years or more.

Investment In People Award - For companies who demonstrate exceptional investment in the progress, training development & rewarding & recognition of people.

Commitment To Tourism - For active businesses that promote and serve the tourism industry in Eastern Cyprus.

Heart Of Gold Award - This award is unrelated to business. This will be someone who gives selflessly to others for no personal gain or gratification & who will most probably be unaware of the magnitude of their contribution.

 

Each award will be sponsored by one specific company... Sponsors will be announced very soon! There are still 4 sponsorship places left. If you are a business owner & wish to be considered for sponsorship please contact Natalie on : 99019608.

 

There will be two other awards both sponsored by Daxi Magazine:

 

The Peoples Choice Award/Outstanding Contribution To The Community - Public vote award for charities/non profit organisations only.

Business Of The Year 2014 - Overall winning business 2014

 

Instructions on how to nominate (or vote in the case of the charity award) will be detailed in the September Daxi Magazine as well as on our website www.daximagazine.com & on various other websites from mid August, ready for nominations categories to open on 1st September .

 

Tickets will also go on sale on 1st September although companies, groups or organisations can pre-book tables (12 people per table) by calling: 99019608 or e-mailing: info@daximagazine.com.

 

 

Tickets are €35 & include:

 

Banquet Dinner

Unlimited local beers & wines as well as soft drinks, coffee, tea & water. (Spirits can be purchased separately at the bar)

Awards Ceremony

Live Entertainment with Chris Andre

Disco with DJ John Lime

 

The dress code is STRICTLY FORMAL.

NO JEANS, TRAINERS OR TEE SHIRTS.

Gentlemen: Shirt, tie & Trousers or a suit or tuxedo.

Ladies: Evening or cocktail dresses.

 

A professional video & photographs from the night will be available for purchase after the event.

 

Whats My Price?

What’s My Price?



The price of your product should be determined by several factors:

Do your market research. Check out other companies in person or research online to see the current price point of products/services. Ask existing customers about products & pricing by using surveys, customer feedback forms etc.

 
Perceived value:

 
Is this a product easily accessible everywhere – if so pricing must allow you to still make a reasonable margin when marketing the product at a price similar to other places stocking the same thing. But your perceived value may be higher. For example: If a lotion is sold in a 5* spa it may be perceived by the consumer to be of higher value than the very same product sold on a supermarket shelf. If it is a service, maybe your after service or technical support for example is far superior so therefore the ‘value’ to the customer is greater. As a business owner or sales person it is our job to show the ‘value’ of the product or service to our client. Fashion is a good example if suddenly an item becomes a ‘must have’ because it is seen being worn be a celebrity then the price rockets.

 Costs

 
Your price is also determined by your costs: rent, wages, production, petrol, packaging, cost of production, marketing etc. More production means buying or producing more volume, which brings costs down. The more a customer buys the more discount he should attract so if you buy & sell products in business you should work with your supplier on an 'economy of scale' discount system.

 
Alignment


 
Anybody buying anything needs to perceive the price they pay is in line with the value they will obtain.  Maybe that’s not a conscious decision but it’s always there. If the price is greater than their perception of value, it’s too high. Notice: ‘their perception of value’ , not yours. Simplistically you have to align your price with the value your customer thinks they will obtain.
 
Establish the value

 
Very often you can’t control the price, but you can control the value. That makes the challenge to ensure your customer or client appreciates exactly how your product, service or solution fits their situation.

You get there by understanding the impacts your solution will deliver & working with your client to establish the financial benefits they will enjoy.

It’s then a fairly straightforward step to building a return on investment (ROI) case with your client & the value is proved.

 Economics

 
The problem is people get hooked up on the ‘price’. In my experience stating the price alone frequently results in the ‘way too expensive’ response.  The secret is to express the price in the context of its ‘Return on Investment’ & not allow the two to become separated. Shift your thinking from ‘presenting the pricing’ to ‘presenting the economics’.

For example: A product with a five year parts & labour guarantee commands a much higher ‘perceived value’. In other words, people expect to pay more initially for the ‘value of’ not having to pay out several times in years to come if the product breaks down. ‘You Pay For What You Get’.

The same goes the other way round when we ourselves become the customer. As businesses we all use services & no matter how ‘cheap’ a service appears to be, whether it be your accountant, solicitor ,advertising or staff, if that service does not meet a high standard in bringing results or adding to efficiency or saving you money then you have still wasted money & time & will still not have received the service or the benefits from the service you required. You may therefore conclude it is better to spend more initially for a service that is clearly superior & get a better, more professional service sooner.‘Speculate to accumulate’.




 

Whats My Price?
 

 

You can find articles like this in www.daximagazine.com

 

Business Services


The saying goes...’Your business is only as professional as the people & services you employ’.
What this means to most business owners is that choosing the right service providers for your business is key to it’s success. Unless you have a very large company that has a vast number of people working for it with departments for every area of your business you will need to source the skills & ‘know how’ of a professional in certain areas:


Accountancy
A good accountant is worth their weight in gold when it comes to the finite detail of tax & VAT systems, especially here in Cyprus where most legal accounting forms are written in Greek. A good accountant can do everything from compiling your accounts, calculating & submitting your social insurance & VAT to auditing & producing final accounts for submission to the tax office. They can also give you good advice on how to legally save money & minimise overheads.

Legal Services
Most businesses operating in Cyprus require a license of some sort. In the hospitality industry particularly there are various licences & due diligence to consider. A goo Lawyer will ensure that you are covered legally with all the appropriate legal requirements to professionally & legally run your business in it’s specific market.

Marketing
Employing the services of a good design & marketing company will help you create a professional identity & brand for your product or service. Your designer should also be able to provide you with ideas & marketing techniques to attract more potential customers/clients.

Technology
In this day & age it is expected that every serious, professional company will have a website which provides an insight into the products & services on offer. A good web designer can work with your existing brand to create a tailor made website which best promotes & reflects your company & its products & services.
In addition hosting social media sites & actively promoting your business using the internet is of great importance as is the right accounting & data management systems.

Training & Product Knowledge
A good company should know its products & services well. If your company has a large product range usually suppliers are happy to come in & train & educate your staff as to the products they supply & their features & benefits. Having good product knowledge is essential to generate repeat sales with customers. In addition many companies do not train their staff in core areas like sales, customer service or team management, they expect the people who work for them to ‘know’ how to represent the company in these areas. Leaving employee skills to chance based on reluctance to invest in training or based on employees previous jobs or experience is a risky business that could easily backfire. Remember your front line people (the people who have direct contact with the customer) give the first impression of your business. Employing an experienced, proven training company to teach core skills made bespoke to your business environment is one of the best investments you could ever make.

In Summary
The most important thing to consider is that you should remain focussed on what you are good at & the skills you bring to your product or service & let these experts focus on the things that they are best at. Together, with the right people in place you can have a winning combination which will have a dramatic & positive impact on your business.
 

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