How do YOU define value?

Merriam Webster’s Dictionary defines value as:  “relative worth, utility, or importance.”  Note how it differs from their definition of price:  “the cost at which something is obtained.”  I’m certainly not the first to draw that distinction, but before we got too far along, I wanted to establish that we’re talking about two different things and, here, only about value.

A retailer in Lynchburg, VA once told me he’d rather have ten $1,000 customers than one $10,000 customer.  I asked him why and he said that it meant 9 additional transactions, 9 additional chances to build the sale to exceed $1,000 and nine times the amount of customers who could refer him additional business.  And, in case he did not please one, who never bought from him again, his losses were one tenth what they would have been if he’d lost a $10,000 customer.  For him, more smaller sales had greater upside, and less downside than fewer larger ones.

Last week, I read a comment on another sales blog from a VP Sales who said that if he had one rep who brought in $50,000 of monthly revenue at a 30% margin and another rep who brought in $100,000 at a 10% margin, he would be more pleased with the first rep’s results.  This is also a valid way to assess the value of these deals, by their bottom-line profitability.

But, what if that $10,000 customer in Lynchburg told another $10,000 customer?  What about the servicing cost of ten times the transactions?  And, of course, how profitable were the sales, as the VP Sales observed. 

But, what that VP’s $100,000 revenue came from a marquee-name company widely recognized as an industry thought leader?  And that $100,000 of lower margin business became referencable business that brought others in that industry with them?  See what I mean?

So, the first step in building the value of YOU and leveraging that into more business is to determine how YOU define value in the business you will seek to acquire.  Whether you want to build your business from the bottom up, top down, brick by brick or by elephant hunting,  before you can demonstrate value to others.

Please comment, or email, and tell me how YOU define value in growing your business!

You gotta start SOMEWHERE!

So, here I start. Actually, I started this about 10 years ago when I wrote the monthly sales column for the website of the dotcom I worked for at the time. (Anyone remember Cruel World?)

Visitors to that site were mostly MBAs from top 50 b-schools and I wrote primarily about the basics of sales, and ideas on frequently-encountered problems. I received great feedback from lots of salespeople at various stages of the career development. It appears that many of the hills I had climbed were facing lots of other salespeople.

Fast forward to now. In between, I worked with dozens of salepeople in different industries all over the country. Know what? The same hills are keeping salespeople from achieving their goals!

In future posts, I will discuss some tools that we ALL possess, that most of us underutilize or, completely ignore. These tools work in most any industry, with most any type of sale, in good or bad economies. Yeah, anyone who has been in sales long enough has heard some speaker talk about the “magic formula” that applies in EVERY situation and NEVER fails.

I’ll answer your questions, help you analyze your own wins and losses and build the value of YOU.

This is not a magic formula, and it may not work in YOUR industry (though I really, really doubt it) or YOUR type of sales (ditto). But, it hasn’t failed me or anyone I taught this to yet. So, what have you got to lose, but last place?