Sales and marketing, Channel markets

Stop All This Nonsense About Value Add!

Author: David Brock, president, Partners in Excellence
Author: David Brock

There’s a fascinating discussion about the various dimensions of “value” driven by Deb Calvert’s article on Why Prospects Are Buying From Your Competitors. Here’s the link to the discussion, be sure to look at it.

But there is a part of the discussion that really bothers me, it’s about the concept of Value Add.

First, all of us have been raised to think about and sell our Value Add. It’s become second nature to every sales person. It’s all those extra things that we “add” to the basic value the customer expects. “If you buy from me, here are all the extra things we ‘toss in’ for free.…”

Too often, however Value Add becomes a distraction, rather than focus on value we focus on the Value Add—those extra things.

I think the concept of Value Add is flawed and our focus on it distracts us from truly serving the customer.

First, we have to think, “What is value?”

The answer to that is not some abstraction, but it is very specific. The customer defines value and what they value. We can’t define it for the customer, our job is to understand what they value and then to present what we do in the context of what they value.

If you think about this, you can start to see the problem with the idea of Value Add. It’s all those extra things–but it’s driven by what we think is important and adds value, not by what the customer values.  We can’t define value, hence we can’t create those things that add value.

Value always comes back to the customer. If it’s something they don’t care about, it’s not value. In fact it’s cost–more on this later.

You can begin to see the silliness of value add: “You have me as a dedicated sales person to your account,  we are constantly innovating and leading in new product development, I take you out to dinner and play golf with you at least once a quarter, I send you and your kids birthday cards, I’ll give you my home number if you have problems…..” Yes, the things, the extras that we think should be important and get us “extra credit points” with the customer can range from the serious to the silly.

More importantly, by definition, they don’t address what the customer values–so they are a distraction.  They distract both the customer and us from understanding what the customer really values.

Moreover, every time we engage the customer in a discussion of our value add, we are adding to their “buying burden.” Ultimately, this added value also creates added cost. (Nothing we do in added value is free–it costs something, either real dollars or our time–which can be translated into real dollars).

As a customer, when sales people start talking about added value, my response becomes, “That value add is not important to me, but since that’s something you provide as an ‘extra’ if we do business with you, please remove it, and reduce your price.” (It’s huge fun seeing sales people deal with that objection.)

You can see the concept of Value Add, really becomes meaningless.

We do ourselves and our customers greater service and create greater value by focusing on understanding what they value, then demonstrating how we deliver that value in our solutions. And how we deliver it better than any other alternative.

This is not trivial. Customers don’t necessarily understand what they value. We have the opportunity to help them understand this, help shape what they value, help them better define what value means for them.  This is part of “Value Creation.”

But that’s another post 😉

Let’s focus on what the customer values! We don’t do a great job at this, but this is what they care about.

David Brock is president of Partners in EXCELLENCE, a management consulting firm focused on sales productivity, channel development, strategic alliances and more. Read more blogs from Brock here.