What is value from a client perspective, and how can we be sure we are delivering it to clients?
We have
rarely seen a sales function define what value is in the context of a Sales
organization or a customer. That is,
until now. Using the principles of Lean selling, you will recognize that there
are two types of value -- intrinsic and extrinsic.
"Intrinsic
Value" is the inherent worth of a product or service. The value is based on
capability that the product or service delivers “in and of itself.” Typically,
these are commodity-based products or services available through multiple
suppliers—where the value of the item is closely equivalent to the purchase
price of that item. For example, anyone can purchase a power cord for
recharging their cell phone at around $10.
"Extrinsic
Value" is the portion of a product’s or service’s net worth to a customer that
is agreed and assigned to it by external factors. These factors are typically
external to the product and service itself — they typically relate to the
customer and their particular business. Selling extrinsic
value may involve the customer making radical changes to their own organization
to recognize the business value that a product or service can provide. The
automotive industry provides an excellent example of extrinsic value in that
customers often buy high-end vehicles at prices that are tens of thousands of
dollars higher than less prestigious vehicles.
Here the automotive industry sets their price based on the extrinsic
value of the vehicle from the customer perspective.
The Lean
selling methodology provides proven principles and practices for identifying
and delivering extrinsic value to a customer.
Lean has a long and successful history of improving
businesses by simplifying processes to gain operating efficiencies, thereby
providing a competitive advantage. Almost everyone is aware of Lean’s deep
roots in the manufacturing domain, originating with the Toyota Motor Company
where the Toyota Production System has become the premier operating model for
manufacturing companies across the globe. Everyone in business should also be
equally aware of Lean’s successes outside of the manufacturing domain. Lean
thinking has proven to be quite successful at dramatically improving processes
in the financial and healthcare industries; as well as many other business sectors and organizations across the
globe.
Lean for Sales describes how the proven “Science of Lean” can
be successfully merged with the “art and know-how” of the sales professional to
provide a client with unparalleled sales service and support. Lean Selling is
the term coined here to describe a unique methodology that combines Lean
methods with the more traditional approaches to sales. When these powerful
selling techniques are applied collaboratively with a client, the sales cycle
becomes much more efficient and the client experience is dramatically improved.
Lean for Sales describes these Lean Selling techniques and provides a framework
for the reader to apply these techniques within their own business and across
their client base.
How can Lean for Sales help a sales organization to
deliver unparalleled value to their clients?
In our book, Lean for Sales: Bringing the Science of Lean to the Art of Selling, we are stating that in today’s highly competitive business
environment the traditional selling techniques do not focus enough, if at all,
on how to develop a sales engagement based on gaining a deep understanding of
the customer’s real business problems and how these problems impact their
business. The goal of this book is to
enable the sales professional to use a scientific and repeatable approach for
leveraging actual client data that relates to an actual business problem and an
agreed upon outcome. We call this
approach the “science of selling,” and the Lean for Sales methodology offers a
proven, repeatable approach for combining the art and science of selling to
deliver unparalleled client value.
For the reader: Do you think think Lean principles can be applied to the sales function of your organization? If you have applied these principles, were there measurable improvements? Where were the problem areas?