To Increase Your Sales and Revenue Make Sure To Add Value
What are you and your company's services and products worth to customers? What is the value you and your company bring to your customers? When working with customers and organizations, it is important to distinguish the difference between worth and value and to set a baseline value for the contributions you bring to the table. To illustrate, following is a simple example based on a company that provides training to other companies:
Terry Trainer will develop and deliver from scratch a one-time 4-hour workshop on teamwork. Estimated time for design and development is 20 hours. Prep time is 2 hours. Delivery time is 4 hours. Post-delivery time is 4 hours (evaluations, follow up, etc.).
Terry's rate of pay is $100.00 per hour for a total of 30 hours = $3000.00. Estimated materials cost is $1000.00. No travel or other expenses. Total for project = $4000.00.
So in this example, Terry Trainer's worth is established at $100.00 per hour and the expenses incurred are $1000.00. However, what is the value that the customer is getting for his or her investment of $4000.00?
To establish what it is worth to the client, both Terry and the customer need to determine the perceived effectiveness of the training. Will it solve the issue at hand or will it only solve a portion of the issue at hand? Keeping with our example, let's assume that Terry Trainer and the customer have met and determined that this training is exactly what is needed to solve a workflow problem that is costing the customer's organization $1000.00 per month in lost efficiency.
Terry has explained the process she intends to take, the alternatives this process provides to solve the issue, and how the training is going to be applied and measured once attendees leave training. Through evaluations and follow up observation, the customer and Terry will determine the overall effectiveness and value of the training.
Terry and the customer also identified as many obstacles as they could that might get in the way of a successful learning experience for attendees. Through this process they found several tradeoffs including delivering the training on a backshift rather than asking attendees to come in on their day off during the day. If the training is effective, it will take four months to recoup the cost of the training and then each month after that is value added to the bottom line. That is a pretty good investment-to-value ratio to consider.
To make sure you are adding value to the customers and organizations you work with, keep the following in mind and make sure to:
-- Identify two or more possible solutions or courses of action
-- Identify the value of requested solution(s) by comparing
1. The cost to design, develop, implement, maintain each solution
2. The likelihood that solution(s) will be used by target audience
3. The probability of solution(s) achieving desired outcomes
4. The impacts on all stakeholders involved including the organization's ability to support solution(s) and the risks of success and failure of proposed solution(s)
-- Recommend only solutions that add value, are feasible, and are most likely to accomplish the desired outcomes with a minimum of risk
-- Describe potential value added and how it will be measured for example:
1. Increased safety, customer service, job satisfaction, productivity, etc.
2. Increased revenue/profit
3. Decreased costs/expenses
4. Decreased error rate, lost time, time to market, etc.
5. Increased on-time delivery
6. Increased reliability
7. Better retention rate of employees
-- Outline risks, tradeoffs, assumptions
-- Document the expected value added through use of a contract, memo of understanding, project scope, etc.
-- Be honest, challenge assumptions, and act with integrity
-- Don't mislead clients or customers on your expertise or overextend your capabilities. Don't over-promise and under-deliver
-- Find ways to over-deliver to your clients or customers - give them more added value than they ask for
By defining you and your company's worth and value as two separate processes, you will go a long way in convincing customers that they should buy your product or service.