How to create value for your professional clients
By Michael Lovas
*Co-written with Pam Holloway
Are you really creating value for your professional clients, or merely claiming to? That question tends to make people stop in their tracks. When we ask producers and advisors to say exactly how they add value, responses typically fall into one of three categories:
1) An uncomfortable laugh (voidance/no response), "Oh look, donuts!"
2) A response based on a naïve (sometimes arrogant) belief that the product or service itself constitutes enough value
3) A description of pre-packed value as defined by someone in the corporate office with little or no understanding of real clients and their unique situations
Whose value is it, anyway?
Part of the disconnect lies in who defines the value. If you believe that you know best and can decide what constitutes value for your clients, than you could be imposing your definition of value on them. And, unless you're a talented psychic, what you perceive as value and what your client perceives as value are probably very different.
In the end, value is personal. It's a perception, like credibility and likeability. And it's not your perception that matters; the client's perception of value is the only one that matters.
Now, let's look close-up at a more effective way to define and present value.
You can't add value to the client until you truly understand your client
Now, here's the next wrinkle, you can't add value unless, and until, you truly understand that client. And we're not talking about basic demographics or sales information, we're talking about real knowledge of his/her business, industry, challenges and personal values and criteria. Can you quantify how versed you are on these issues? Let me help. Answer the questions in the followingsurvey to get a quick idea of where you stand.
How much do you know about your clients?
1. About the client's industry and market
On a scale of one to 10, How would you rate your:
a. Understanding of the client's industry including history, structure, processes, and terminology (Can you credibly speak the language?)
b. Knowledge of Industry trends and current events
c. Understanding of and ability to help clients deal with market challenges
Can you identify your client's:
a. Strategic focus/vision
b. Strategic business objectives
c. Top five challenges, worries, concerns, fears
d. Ideas for how best to deal with challenges and constraints
Can you identify:
a. Why they buy or consider your product or service
b. What it "buys" them (the benefits in their terms)
c. What they're using now, feelings about or problems with what they're using now
d. How they see you (you personally, your company and your product/service)
e. Their personal values, criteria and decision-making style and what you need to do to connect
Here's what happens. Sellers often lose important sales because they lack credibility in the eyes of the buyer. And, the main reason they lack credibility is they simply do not understand their client's life or business. Amazingly, those same sellers insist they are adding value.
It's a simple fact of psychology that prospects are not going to listen to you pontificate about how important you are to them, or what you can do for them, once they recognize you do not understand them or their business. And, there's no way to hide what you don't know.
As Barry Farber says in State of the Art Selling, "You cannot relate to a man in business without understanding his business. A man in the oil business wants you to understand the oil business, and what a drilling rig is, and what upstream and downstream means, and what crude and refined is, and what's OPEC and domestic, and who his competitors are, and his recent history -- has it been good or bad and why. Too many salespeople don't know anything about business, let alone the client's business."
Know your clients
The first step in becoming a true value-adder is to know your clients. As remedial as that might sound, realize that value is a perception -- the client's perception. So don't assume you already know what's important to your clients, or how they define value. Don't assume that everyone's challenges and reasons for buying (or not buying) are the same. Don't assume that what worked for the previous person is going to work for the next one, or what worked for a client last year is what will work for them next year.
Adding value is a dynamic, custom, client-specific process. Important clients are not looking for pre-packaged value or one-size-fits-all solutions. They want a problem-solving partner who know their business and are able to create value on an ongoing basis.
The process of getting to know your client
Let's take a financial planning prospect. What would you ask in order to learn how you can add value to that person? Here are a few (all too) common questions:
1. What will happen to your family if you die tomorrow?
2. How will you educate your children?
3. How will you build a retirement income that you and your spouse can't outlive?
4. Half of one's lifetime medical expenses may come in the last five years of life. How will you prepare for that?
5. If your retirement assets are intended to fund the rest of your life, how will you leave any estate to the people you love, with a minimum of taxation?
6. Consider the institutions that have impacted your family's life. Will you wish to be a part of their future by leaving them a legacy?
I recently polled professional consultants about the top three questions they ask a professional prospect. Here are the top ones:
1. What is it that your current advisor doing that is great and makes you want to stay with them?
2. What is your current advisor doing that you don't care for or wish to change?
3. If I asked your spouse and than your colleagues, what would they say are your greatest accomplishments?
4. Do you have a financial plan in place?
5. Would you see the value in financial planning?
6. How would you like to move forward?
What is the most common question? I can't verify this, but I would guess that it is, "What's important about money to you?" Some people are really good at using such an invasive and open-ended question. Most are not, and as a result, asking such a question tends to annoy and alienate the prospect. You'll know when that happens because you'll see his/her eyes roll.
Again, what's wrong with that question? Here's a hint -- it is rooted in the advisor's perspective. It fails to show that you know anything about the person. It is not a question intended to help the financial planning prospect; it's a question intended to help the advisor. Fact is, very few people list money as one of their values. So, even if you get an answer, it's not helpful. So, where is the value in that? And, who benefits from that value?
What's missing from all those questions? The prospect! Because we help other firms define their own professional target markets, we've already been through the research many times and know how to do this. Learn from our experience.
The process of getting to know the client may involve complex market research, or it may be as simple as engaging your clients in a meaningful conversation. Generally, it involves both. The bottom line -- the more you know, the easier it will be, not only to engage them, but to make a real and sustainable difference for them.
Step 1: Do the research
Do the work. Start by doing some research on the market in general. Oil and gas, retail, transportation, construction, medicine, consulting -- what do you know about the industries or the language they use? Look for industry studies, reports, and articles that provide insight into your clients, their competitors and what's important to them. This may take some time and effort, but you will find that the return far outweighs the effort.
If you have a marketing department, ask them what they have in the way of insight into your clients. Identify the key research sources for your industry. Do your own Google searches. Get and stay plugged into the buzz.
If your prospect is a decision maker -- no matter the industry -- research that industry. All professionals seem to think their industry is different. If you show that you don't know about that industry, you're lighting up a flashing sign announcing the void in your smarts.
Step 2: Start a meaningful dialog
Most business professionals love to talk about their business. Unfortunately, most producers fail at listening. Worse, they fail to engage clients. It's well documented (and our experience, too) that producers cannot listen because they are too focused internally on what they're going to say next.
When you get professionals to talk about their business, their goals, and their frustrations, you'll find all the information you need to add actual value. So, before your next meeting, vow not to talk about you, your product, or service. Instead, ask some simple questions that will help you understand the client's business model, how his world is changing, what is working and not working, and where you can help. That simple adjustment just might mean the difference between yes and no. It would certainly take you a giant step closer to providing real value to them.
Step 3: Ask the right questions
It's unlikely that you could create value without asking the right questions. You want to ask your clients the right questions so you can learn more about them and determine how you can best add value.
You also want to make sure you're asking yourself the right questions. True value-adding salespeople keep this question front-and-center in their minds: "Where can we have the greatest impact on the client's business?" True value adders also inherently believe that they win by helping the other person win. It's easy for them to focus on the client, because they genuinely believe this is their own path to success.
Your personal value-add
Research suggests that a big part of the value equation is you, the seller, producer, or advisor. You and I can sell the same product or service, and even work for the same company, but our solutions and ultimately our "value-add" will likely be very different. Each of us brings to the table different competencies, attitudes and behaviors.
In fact, every solution is really a three-dimensional solution: your product or service, your company, and you. According to the research, salespeople contribute at least one-third the value that clients receive. The company and product contribute the balance. To represent true value, all three must be world-class! Look around your community and notice the producers who provide little or no actual value other than a product.
As you begin to create your value-add, keep this three-dimensional model in mind. The tendency is to focus only on the product or service, overlooking the other two-thirds of the equation. When you focus on all three, you triple the impact, thus greatly increasing your chances of writing new business and keeping that business for a long time.
The payoff for becoming a true value-adder is real and substantial. For starters, it makes for an easier sale. Clients look forward to your visit. They already want to do business with you. They seek you out.
Another payoff from value creation is that you rarely ever have to worry about price. That is, so long as you keep the focus on the client's definition of price. Tom Reilly, author of Value Added Selling Techniques, said, "If you define value in client terms, they pay for it with a higher selling price. Conversely, if you define value in your terms, you pay for it with a bigger discount."
*For further information, or to contact this author, please leave a comment and your e-mail address in the forum below.