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Negotiation Boot Camp Article by Ed Brodow
Articles

The Meaning of Value

by Ed Brodow

Ed Brodow - Can a Good Negotiator Make A Difference?In my Negotiation Boot Camp® seminars, one of the major negotiation learning points for salespeople is to shift the focus from price to value. We know that the buyer wants a lower price. But if the seller can provide value, then the buyer will pay more. Value is the key to sales negotiation. But we tend to be cavalier in the way we use the word value. What do we mean when we say, "Sell Value!"

Value is the perception by the buyer that a problem has been solved.

Every buying decision revolves around a problem that the buyer must solve. A problem means the buyer has a need that is not being fulfilled. For example, you are hungry. You have a need–hunger–that is not being met. How do you solve that problem? You buy food. The value of food is that it solves the problem posed by your hunger.

In order to take the focus off of price, the seller must:
1. Determine what problem the buyer is attempting to solve.
2. Provide the solution to the buyer's problem. The value of the seller's solution is that it solves the buyer's problem and fulfills a need. The more that is at stake for the buyer, the greater the perceived value.
3. Differentiate the seller's solution from the solutions proposed by competitors. It is not enough to have a solution. It must be the best solution, and it must be different. If all the sellers have the same solution, then the buyer can simply choose the least expensive provider. But if your solution can stand out from the crowd, you can get away with charging more for your product or service. The buyer will happily pay a premium for your unique solution.

Notice that all reference has been to the solution of the buyer's problem, not to the seller's product or service. The reason: You are not selling a product or service, you are selling a solution. The buyer does not care about your product or service. The buyer is interested in one thing only: Solving the problem. What this means is that sellers must distinguish between features and benefits (value). A feature describes a characteristic of your product or service. A benefit is what the product/service does for the buyer, i.e., how your product/service provides the solution to the buyer's problem. Features are important to sellers, but benefits are important to buyers.

The last point I want to make is that value exists only to the extent that it is perceived by the buyer. If the buyer does not understand how your solution works, it has no value. Conversely, if the buyer perceives value, it can be said to exist even if the seller's solution is second-rate. So if you are the salesperson with the best solution you can still lose the sale if the buyer perceives that your competitor's solution is superior. The buyer's perception is what it's all about.


Ed Brodow is a keynote speaker and negotiation guru on PBS, ABC News, Fox News, and Inside Edition. He is the author of Negotiation Boot Camp: How to Resolve Conflict, Satisfy Customers, and Make Better Deals. For more information on his keynotes and seminars, call 831-372-7270, e-mail ed@brodow.com, and visit Brodow.com.


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