Creating and Selling Value: Creating Value: Sales & The Value Pyramid

By Dora Cheatham, Emerging Enterprise Center

Going from supplying a product that meets basic customer expectations to contributing to a client’s organization can be hard to establish and even harder to maintain, but is an invaluable strategy for long term profitability. Keeping a customer requires the creation of a relationship of mutual trust and partnership that goes beyond supplying a quality product.

Seeking to create value and a sustainable competitive advantage is increasingly difficult in today’s data-filled environment. Buyers today are educated and savvy. In the B2B world, the buyer can be 60-65% through the purchase process before he or she even makes contact with an incumbent or potential vendor. They know what’s out there and what it costs so if all you have to offer is a product that meets specifications, then you have effectively created a situation where your only option is to sell on price—and the lowest price invariably wins. That also means that as soon as a competitor emerges with the same option at a lower price, then chances are that customer is lost to the newcomer. So how can you ensure that your customer remains loyal to your product and business?

Smart Buyers Seek Value

A truly smart buyer understands the value of a vendor that contributes to the smooth running of his or her business. If you can deliver a flawless product, on-time, every time, with excellent customer service, then it behoves him to use your product—because spending time dealing with vendor-related problems and quality issues costs money and impacts his own customer service and bottom line (think about the UPS “I’m happy” ads where department managers and customers are happy thanks to UPS Logistics).

By supplying a quality product with excellent customer service you have already established some level of competitive advantage. And many companies today provide good products with good service – it is a prerequisite to staying in business. To sustain that advantage however you need to continually climb the value pyramid and add to your product in terms of additional service and knowledge, eventually making a quantum leap to the peak of the value pyramid to establish yourself as more than a vendor, but a trusted strategic partner.

Can you help lower your customers’ costs or improve their productivity? Can you help them identify new products or markets? At an even broader level, can your customers call on you for advice on operational systems and processes or strategic direction? In other words, does your customer consider you a supplier or a partner?

Schematic adapted from Doyle P. and Stern P., Marketing Management & Strategy, 4th ed., Prentice Hall

 

As you climb the value pyramid, commoditization decreases and company and product value increases, with fewer competitors able to compete at the same level. The fundamental difference between the lower and upper levels of the pyramid is distinct: to be good at the former, the salesperson and business needs to have a top quality product to sell and needs to understand his product and his own business well.

To be good at the latter, the salesperson and business needs to have an understanding not only of his own product and business, but of his customer’s business as well. He needs to understand his customer’s individual and industry needs and must excel at consultative selling, offering solutions that are of mutual benefit to both organizations. Only then can you hope to ensure an enduring partnership and long term rewards.

You don’t close a sale; you open a relationship if you want to build a long-term, successful enterprise. Patricia Fripp.

Either Ride the Wave, or Watch as it Passes by

There’s a storm brewing in the business community. It’s building around technology, and Delaware just may be in the forefront. Delaware Innovation Week held last week, encompassed 20+ events across Wilmington and New Castle County. It brought together entrepreneurs, technologists, civic leaders and investors.

Two years ago, at the Economic Development Council Luncheon, presented by the New Castle County Chamber of Commerce, the keynote speaker was Steven Rosenbaum, Entrepreneur-at-Large for New York City. What resonated with me was him saying that it was “no longer just around biotech or medtech.

Traditional industries were being disrupted by technology. It was becoming “Industrytech”, like financetech and manufacturingtech. We’re already familiar with disruptive technologies. Companies like Uber, Airbnb, Amazon, LinkedIn, eTrade, Turbo Tax, and Expedia have revolutionized entire industries. These are frictionless business models, where technologies are used to identify and resolve inefficient processes in every industry. DeliveryCircle® , a Delaware start-up has done this for small package delivery; matching drivers, consumers and merchants in a fast, easy, seamless transaction. Soon, every company will be a software company.

Fast forward to today in Delaware. Established incubators, the Emerging Enterprise Center and Delaware Technology Park have been joined by the CoinLoft and 1313 Innovation, giving start-ups and entrepreneurs, different types of work spaces.

Zipcode, an intense 12 week program that trains people how to code was launched with the support of private companies like JP Morgan Chase, Capitol One and Chatham Financial. Techies have been getting together at Tech Mashups, and Global StartUp Weekends, to exchange ideas and build a community. Technically Media came to Delaware. Technical.ly grows local technology communities by connecting organizations and people through news, events and services.

Delaware Innovation Week ran November 13th -20th. There were events built around major tracks: Business, Civic, Creative, Dev (Development) and Media, plus events that companies and organizations staged that were incorporated into those tracks. Two specific events demonstrated why Delaware has become a Storm Chaser in this technology tsunami. At Technical.ly Delaware’s Stakeholder Luncheon, 40 people gathered to discuss the state of the tech community in Delaware. Someone commented, “it was a long way from the days when the same tech people sat around telling each other over and over again that something needed to be done”. You had Jeff Flynn from the City of Wilmington, the NCC Chamber of Commerce, along with graphic designers, developers, bankers, coders, and entrepreneurs sharing ideas, accomplishments, challenges and goals. It was a picture of diversity not typically seen in either a techie group, or in the boardroom. The 2015 Innovation Awards was another example. There were typical “tech-type” companies recognized,  but two were not typical; #HugACop, a viral campaign by the Newark Police Department and Delaware Libraries, for extending STEM & 3D Printing literacy to its branches.

Delawareans, coming together, can do amazing things. What I saw at Delaware Innovation Week makes me believe that our community can harness the storm’s energy and be the model for the new technology age that’s coming. Come join us!

 

By Frank DeSantis.

Frank J. DeSants, Program Director for the Emerging Enterprise Center, a business incubator that helps start-ups focus their efforts on driving business growth, developing business skills, and creating a scalable and sustainable business model, by providing support, access to resources and advice, in a nurturing environment.