You’ve heard it time and again – establish value before you start pitching your solutions! Establish value to make more sales!
Well, initially, I had no idea what that meant for me as a new business owner.
I worked in corporate roles for fourteen years, and I like to think I am fairly intelligent, but none of that helped me to quickly figure out how to pitch my services so I wasn’t “selling”, which I don’t particularly like to do.
Another thing I found challenging was establishing my value to myself first. The things I do are ‘normal’ to me. It doesn’t feel like work and so I couldn’t wrap my head around the value I offered others by doing what I do. Do you know what I mean?
Now, in my work as a business strategy coach to entrepreneurs, converting prospects and making more sales is a challenge that comes up over, and over again with my clients.
So, I figured there might be a few more of you out there who have the same challenge. You want to offer a service or product to paying customers at a price that both you and they are happy with, but aren’t too sure how.
You may also want to know how to do this quickly and with as little technical jargon as possible!
So, here it is – a quick step by step guide to understand how to establish the value of your product or service to a potential client, and make more sales.
To start with, what does it mean to establish value?
You establish value when you have a service or product that serves a client’s needs at that moment, and makes them willing to pay you a fair price for it.
Establishing value is done by asking questions that help you understand the challenges your prospect is facing, what a solution is worth to them, and what timescale they are working to.
Your prospects have many things to worry about. Business can be complex and stressful and the challenges faced require prioritisation when a solution is being sought.
As a provider of a solution (product or service), your job is not to sell, but to understand exactly which challenge is of the greatest priority to your prospect at that moment in time, and seek to provide a solution. If your solution meets their most urgent challenge(s), then you have an open door to walk through.
Lesson 1 – Don’t sell anything, until you know what problem your prospect wants a solution to.
Imagine you have an event to attend – an awards ceremony, and you pop into a store and the salesperson comes up to you with a big smile and a booming voice. He or she says, “Good afternoon, how are you?” and then reaches for a hanger on the rack, shows you a shirt and says, “Try this on, it’s in what I think is your size, it’s a lovely colour for you, and best of all, it’s going for a song because we currently have a half-off sale on!”.
You would either think they were bonkers, or if you’re like me, you’d mutter ‘no thanks’, back up towards the door and make a quick escape.
Because, they didn’t take the time to understand your needs, they didn’t ask why you were there, what you were looking for, what type of event it was for, if you had looked at other items you liked and what they were, what your budget is, etc.
They seemed more interested in selling you what they had, rather than what you need / want.
This is the same in business. Entrepreneurs worry too much about missing the opportunity to get a sale, and so they eagerly chuck their entire toolbox at prospects.
The result is potential clients get confused or overwhelmed, and quickly lose interest because in all the babble, they missed what could have been their best solution.
Don’t be desperate. Focus completely on the prospect and ask questions! Find out what they are worried about, and why that challenge is important to them / their business at this moment in time.
Find out whether it’s really the main priority or whether they just perceive that to be the case.
Be directionally curious- by which I mean dig deeper with focus.
Lesson Two – Explore their goals and what results they want to achieve.
Now you know what challenges they are facing, try to find out what results they want to achieve.
It’s like this. Think of a time when you went to a gym to see about signing up for membership. It’s just after New Year’s (right?) and you want to get your act together, and lose some weight.
You arrive at the gym, indicate an interest in their packages, and a buff guy (or girl, let’s not discriminate) comes over and starts to ask you questions about your reasons for wanting to lose weight, and what’s your most important goal to achieve.
They do all this to guide you towards the best package they have to offer that suits your needs.
By establishing your prospects goals, you move closer to understanding what to offer them.
Your focus is understanding what outcomes they want to achieve, and what monetary impact it will make on their business. Understanding what a solution means to them in pounds or dollars will help you highlight the value they receive by buying your solution.
Ask questions like:
- Ideally, what do you want to achieve in revenue growth over the next 12 months?
- How will this change things for you / your business?’
- If you could solve this challenge, what would it mean for your business in terms of increased revenues / reduced costs?
- What will you be able to do / buy / create once _________ is resolved?
- What are you currently losing in lost sales / poor positioning / incorrect pricing?
Lesson Three – Find out what timescale they are working to.
The next important factor is time.
You ever heard that expression ‘needs must’?
Well, one of the best times to pitch is when your prospect has a ‘needs-must’ issue and wants, in fact, needs, a solution to a problem / challenge. Usually, it’s a means to accomplishing something else they really want.
Establishing a timeline not only helps you understand where you are with the prospect, it helps you clarify if you realistically have a solution to offer them. And if you do, that ultimately helps them. More value!
So, don’t hesitate to establish a timeline. Be sure to ask these types of questions:
- How quickly do you need a solution?
- What timescale are we looking at before the situation becomes critical?
- How soon would you want to get started on implementing the change?
Lesson Four – Establish clear measures of success
This is a step that a lot of new businesses forget to take.
You go straight from understanding their goals and timeline, to pitching your solution. This is a trap you must avoid. Measurable results matter for your metrics as a business owner (and even as an employee), and as a way of ensuring that your client remembers what you were tasked with delivering and what they are paying for.
Agree KPI’s (key performance indicators) or measures of success that both parties can point at. This is how you both know that working together was successful.
It’s particularly important for service providers, who sometimes don’t get to hand over a physical product. Scope creep is real people!
Good questions to start with are:
- What percentage increase or growth in revenue / profits / customer visits / sales / other do they want to achieve?
- Is there a timescale / deadline / target they are trying to beat?
- What decrease in costs / increase in savings do they want to achieve?
- Would reducing the attrition rate by X? make this project a success?
Lesson Five – Offer your Solution.
There is a strategy to doing this.
First, summarise everything you’ve discussed and check that you have correctly understood their needs, goals, timescale.
Once you have conceptual agreement, you ask the client whether they would be interested in your solution if you can meet all their needs and deliver to the measures of success. You want them to be saying yes at this point.
As an example, you ask “If I can help you improve your employee engagement, and reduce attrition rates among top-performers by 5% over the next 8 weeks, would that be of interest to your organisation?”. It’s specific, it’s clear, it’s direct.
Now state your solution (a summary of the problems your product or service fixes and NOT how you are going to do it) and ask whether you should send them a proposal outlining how you can help them and giving them a price.
DO NOT give them a price straightaway. You can give an indication, but leave the pricing for the proposal.
Send them the proposal within 1 day of your meeting. Alert them they have mail, with a phone call or text. Arrange to speak with them at a specific time to discuss the proposal.
In the follow-up conversation DO NOT stutter when you discuss your price. Be confident! Now you understand the value you are offering them, you should be asking a price that at the end of the day makes your client money! If you make or save them $1million, they should be willing to pay $60k for it. But I digress. This is the topic for another blog post.
Get agreement if they are happy (get them to email you back a signed copy of the proposal) or make amendments, if there are any required. Handle any objections by pointing to the value you are offering.
Close that sale!
And that’s it. A 5-Step process to establishing your value and making more sales.
As a good coach, I should set you tasks. I would like you to practise establishing your value with 3 prospects in the next 3 days. Try the lessons above and let me know how you get on.
Good luck. You can do it!
If you found the advice given in this post useful, don’t keep it to yourself. Please share it. If you’d like to book a 15-minute chat with me, or learn more about how I can help you grow your business, visit my website here – www.augmentresults.com
Uzo Ijewere is a Business Strategy & Emotional Intelligence Coach. She runs Augment Business Coaching, and helps her clients align their vision with strategy, grow their businesses, and become more profitable. Her purpose is to help entrepreneurs and small business owners build thriving businesses, and corporates to adopt head and heart strategies in the workplace.