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.