Maximizing competitive advantage and gross profit happens when you add value. The more value you add, the more gross profit you are due. The less value you add, the less likely you are to win the deal. And if you do win the deal with low value, you’ll probably leave a lot of money on the table.
Value is at the heart of every business relationship. Whether you’re in sales or marketing (two sides of the same coin) you are responsible for understanding and communicating value.
A great place to begin understanding your value is by creating a Value Inventory. This is a list of all the different ways your can bring value to the table.
Step 1: Itemize Your Value
The first step is to itemize your value. There are three categories of value:
- Product/Service Value
- Company Value
- Personal Value
Let’s explore each of these. (This would be a great team exercise for your next sales meeting. Put three flip charts on the wall and to go to work!)
1. Product/Service Value
We’ll start here because this is the most obvious. This is the value that your product(s) or service(s) bring to the table. Make a list of as many different ways that your product adds value. For example, if you sell Managed IT Services, your list might include:
- Keeps company data secure
- Reduces downtime to keep employees working
- Filters out distracting SPAM
There are likely many different products and services in your portfolio. Over time, you might want to create a value list for each of your core offerings.
2. Company Value
Next, make a list of all of the value your company brings to the table. Consider how a client benefits from the experience on your team, your network of partners, your finance options, and your operations. Continuing our example of a Managed IT Services firm:
- 35 years of IT experience
- Partnered with Microsoft, Dell, HP, Extreme Networks, VM Ware, Datto, and Comcast
- Flexible acquisition strategies with Hardware-as-a-Service
- 24X7 monitoring and help desk support
Company value extends to your involvement in the business community. How are you involved as a leader in your industry? How are you supporting non-profits? What is your corporate culture like? How do all of these add value to your clients?
3. Personal Value
This third category is for sales reps. How does your education, experience, and extra-curricular activity add value? Buyer research presented in Insight Selling reveals that sales reps want insights from their reps. As a sales professional, you bring unique value to the equation. Continuing with our example:
- Working with a variety of businesses across multiple industries for 25 years introduced you to many different business models
- Business degree helped give an understanding of accounting and how business owners keep score
- Classes in Information Technology gave you a vision for how technology could impact a business
- Certified Document Imaging Architect training gave you an understanding of workflow
- Reading Reengineering the Corporation (and writing several blogs about what you learned) gave you ideas on how companies could use technology
- Working on the board of a non-profit gave you insight into how to operate efficiently
- Playing football in high school gave you an understanding of the importance of teamwork
The list of personal value will be unique for each rep. Look at your experienced, education, and other activities and make a list of how these can benefit your prospects.
Step 2: Go Deeper With Elements of Value
Now that you’ve started to list out your value, it’s time to go a little bit deeper. For each item of product, company, and personal value, consider what the value means to your prospects and clients.
There are many different categories of value. Eric Almquist, Partner at Bain & Company, identifies 30 elements of value in a recent HBR article. You can see the 30 elements in the chart that came from their research. (Click on the chart to read the article.)
Each of the value items you listed has at least one element of value. Let me give some examples:
Product Value: Monitoring the network reduces cyber security risks.
- Functional Value: Reduces risk and avoids hassles
- Emotional Value: Reduces anxiety
Company Value: Provide computer training to local at risk youth program
- Emotional Value: Attractiveness
- Life Changing Value: Affiliation
- Social Impact: Transcendence
Personal Value: Working with a variety of businesses across multiple industries for 25 years introduced you to many different business models
- Functional Value: Integrates, connects, saves time, simplifies, avoids hassles
- Emotional Value: Reduces anxiety, attractiveness
- Life Changing Value: Provides hope
Step 3: Communicate Your Value
Look at your client communications. Marketing professionals: check your digital and print communications. Sales reps: check your LinkedIn profile, slide decks, and proposals.
How well do they communicate the value that you bring to the table? The more value you can communicate throughout the buying process, the more resonance you’ll develop with your prospects. This creates competitive advantage, improves win rates, and maximizes gross profits.
This article originally appeared on LinkedIn.