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All Value in the End is a Number

As salespeople, we make efforts all the time to add value to our Customers. Our conversations around value refer to things like (i) value added, (ii) value chain, (iii) value proposition, or (iv) value engineering.

In all of this, it is easy to forget that value ultimately must be tangibly experienced in money terms

The following story adopted from the book “The Dollarization Discipline” by Jeffrey J Fox & Richard C Gregory demonstrates that numbers convince Customers about the value of the choices we recommend to them more than any other form of reasoning. This is the core of data driven selling

You are shopping for distemper paint for your company’s guest house and find many choices at the local paint store. Product X costs Rs.12 per litre; product Y costs Rs.20 per litre. Which paint should you buy?
The salesperson says, “I strongly recommend product Y. Its price may be higher, but it will last 8 years, while the other distemper will last 4 at best. That means that over 8 years, you’d have to buy product X twice, for a total expense of Rs.24 per litre, versus just Rs.20 a litre for product Y. In reality, product Y costs less!”
You reply, “That’s very interesting, but our company may not keep the guest house for long, so I don’t care about how long this distemper will last. I think I’ll go with product X for Rs.12 per litre.”
The salesperson listens and responds, “I understand, but I think product Y is still your best choice. You see, product Y contains 50 percent more of an ingredient, which results in better coverage than product X. This means you will need to apply only one coat to your building. Product X will require at least two coats. This will also cut your labour costs in half. Plus, you are guaranteed that your building will look freshly painted, which will improve the prospects of selling your guest house in case you decide to do it. Wouldn’t you agree that an extra Rs.8 per litre is a great investment if you can get a resale price that you want?”
Finally, you decide. The Rs.20 per litre distemper is actually less expensive than the Rs.12 per litre paint

6 Ways to Use Data to Effectively Communicate Value

Develop a love for data and numbers – Data affinity in sales starts with a joy for numbers. Evince a keen interest in knowing and using numbers in conversations
Build your ability to translate value into hard numbers – “This product has been shown to reduce material costs by 5% “is better than “This product can give your material cost savings” Value makes more sense in percentages, thousands, lakhs or crores
Highlight the stories that numbers tell and invent possibilities – Suppose your company markets hospital lab testing equipment that saves one hour of the technician time every day. It translates to 300 hours per year, which is 37.5 technician days if we assume a 8 hour working day. The story here is that “This gifts your employee more than a month of free time to train on new techniques”
Remember that all choices come with financial consequences – Not acting or delaying a purchase is also a choice and often carries costs in money terms. Gently drawing attention to this may result in a closure sometimes
Stay mindful about price not the only monetary component in a sale - Purchase decisions in B2B can be sometimes myopic and overemphasize the importance of price - Word descriptions lack the precision and impact of data and numbers. So, go beyond articulating features and benefits. Calculate and show the full economic value of your product or service and arrive at a net cost in rupees
Help Customers compare and evaluate true total cost of using alternatives – Many financial consequences of non-price factors that come with choosing one offering over another are at times overlooked. This could have an adverse financial impact for the buying organisation. One easy example is timeliness of supplies. Another could be quality of post-sale support. Monetise all components and express their value in rupee terms

This is the power of Data Driven Selling. For all Salespersons who aspire to excel at Value Selling, the ability to articulate value in numbers, leveraging data and analysis is an essential skill to cultivate.