Before I begin, I would like to take a moment to thank Craig Jamieson for the opportunity to guest blog on this site. We follow his blog regularly and have heard great things about his sales training program.
The old saying goes… time is money, but your time is also limited. A win-win deal that maximizes your interests does not just mean the size of the deal, the profits, or other benefits, but also the TIME you invest to make the deal. It is important to optimize the ROI for your efforts. [Tweet “Your best customers value your offer and are willing to pay for that!”]
Ask yourself: “Does what I’m doing make sense?” To help you answer that question, SNI has created the Value/Pay Grid:
What is Value?
Value is defined as the regard your customers hold for your product or service compared to other options in the marketplace—average, good, better, best. In addition to customers’ assessment of your product relative to other options in the marketplace, value is also defined in how your customers regard you as their representative.
What is Pay?
Pay, just like it reads, is how much your product or service is worth compared to other alternatives in the marketplace. “Pay” is not limited to just dollars; it can also include other forms of gain, need, or benefit.
“How do I know which customers belong in each quadrant?”
Value/Pay
These are the customers that love you and/or your company. These customers are vital to the success of not only yourself, but your entire company. Due to the fast-paced world that we live in where we are constantly trying to expand our brand to new customers, it can be easy to forget about those customers who value us and pay for our services. Never take good customers for granted. A good relationship with your customers is a two-way street. They value you. You must value them and give them the time they deserve.
Example: “I love what your product offers us. I’m confident it’s the right product for us. I love you as our sales rep and that you make sure we are always taken care of. Keep up the good work and I know we will have a long and productive relationship.”
No Value/No Pay
This is the exact opposite of the Value/Pay quadrant. Customers in this quadrant deserve the least of your time. Even though they don’t value your product or personal service, it is vital to know where they stand. If you are kept in the dark about their feelings towards you, it is likely you are wasting valuable time that could be spent on a customer in another quadrant.
Example: “I don’t care about your product or what it has to offer us. I will not buy from you nor do I have any interest working with you or your company in the future.”
No Value/Pay
While some people think this quadrant is a waste of time, it can be a beneficial asset to your company ONLY if it is priced and serviced correctly. Obviously, you may wish to move these customers into the Value/Pay quadrant, but if you can’t, try to maintain your profits if you can retain their business. These customers do not value your product or service, but at least for some period of time, can provide you with a profitable relationship.
Example: “I don’t care about your product or the value that it can provide to us. However, my boss says we need the product, or my boss thinks highly of you, so I’m forced to work with you. When the decision is up to me, our business relationship will cease to exist.”
Value/No Pay
For many of us, this is the most difficult quadrant to deal with. These customers, while they value you or your product greatly, are time- and resource-suckers. They ask for research, proposals, ideas, free consulting, and we keep giving it all to them in the hopes that one day all of our hard work will pay off, but it never does. It is vital that you move them into the Value/Pay quadrant or into the No Value/No Pay quadrant in order to allocate your time more efficiently.
Example: “I love your product and you as our sales rep because you always take care of us. But, I just don’t have the budget to give you my business right now. One day, we will be able to do business together.”
While most customers will not fall neatly into one of these four defined quadrants, it is your job to analyze each customer relationship separately to decide whether the time you allocate to them makes sense. MOVE THEM UP OR MOVE THEM OUT. Never forget about your best customers, Value/Pay. Try to move the No Value/Pay customers into Value/Pay customers, but if that cannot be accomplished leave them as customers who can still be profitable. Customers that fall into the Value/No Pay quadrant must be moved into Value/Pay at some point in the near future. If not, you must cut your losses and walk away as you must do with No Value/No Pay customers in order to maximize your time.
If you find this blog post useful and are interested in more information regarding our sales training, feel free to visit: http://www.shapironegotiations.com/SalesTraining.html
Todd Lenhart
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