In the last few weeks I have had the opportunity to work with three companies that are each leaders in their respective industries. In each case, the products and services they offer, the people who work for them and the way they conduct business are all first rate.
 
And yet they all are facing the same challenge: How to communicate the value they provide to the customer so that they are not seen as a commodity and therefore maintain the profit margin they need to grow their businesses.
 
You Can’t Make it Up With Volume
 
Each percentage point of gross profit margin you lose requires a 4% volume growth just to keep profit steady. A five point increase in your profit margin is the equivilent to a 20% increase in sales. A five point increase in your profit margin can equal a 50% boost to your bottom line profit.

Focusing on Features Can Erode the Perception of Value
 
Chances are that your company has a long list of features that you are proud of. They might include innovative design, flexibility, longevity, responsiveness, superior customer service, well trained staff, convenient locations, fast delivery, customer testimonials, etc.
 
Unfortunately, your customer doesn’t always fully grasp the value that these features bring and therefore may not be willing to pay for them.
 
Understanding How the Customer Benefits from the Way You Do Business
 
In one case my client discovered that the quality of their products allowed their customer to sell the product longer before it spoiled. And because the product was fresher, the customer could charge more money to their customer. And the way they delivered the product reduced handling by the customer, saving them labor costs.
 
Another client discovered that most of all, their customers appreciated that they “saved their bacon” when they needed product really quickly.
 
The third client discovered that the quality of the service they provided helped their customer reduce staff turnover and increase employee satisfaction.

Communicate the Value
 
In our Value-Based Selling program we emphasize two specific skill sets:

1. How to develop great questions that reveal to both the sales person and the customer, the total COST of the problem and the potential value of the solving the problem. In effect the customer begins to desire the solution before the sales person begins selling it.
2. How to communicate the value by describing explicitly how doing business with your company will impact their ability to increase profit or sales. The best method to convey this message is using a combination of success stories, fact based analysis and testimonials.

Purchasing agents and buyers typically get far more training in how to commoditize the buying process. In response, your sales people require constant training & development in selling the value your company provides.
 
Reflection Questions
 
How does buying your product or service help your customer make more money? Is your team capable of consistently communicating this value to your customers?

Action Items 

• List all of the elements of your value proposition – the features and benefits of doing business with your company.
• Craft questions that will help your sales people probe for the problems that create customer desire for your solution.
• Create powerful stories, examples, illustrations and testimonials that can be used to convey the value message in the sales process.
• Give your sales people the skills they need. Not just one-time training… ongoing reinforcement.
• Watch your sales, profits and customer retention increase.

What do people really think of you? Do you even care? Do you care too much?
 
Many of the managers and executives I coach and train start off by being surprised and maybe even slightly insulted to think that they need to improve their leadership skills. After all, they wouldn’t have been promoted if they weren’t competent… or would they?
 
It kind of reminds me of the 1992 movie A Few Good Men when Jack Nicholson, playing the role of Colonel Jessep, defiantly states, “You can’t handle the truth!”
 
The term 360 degree feedback has become much maligned because most of the people who are subjected to this feedback are not open to receiving it in the first place. 360 feedback refers to getting feedback from your boss, your peers and your direct reports, a full circle of feedback.

Self-Deception
 
Let’s examine two patterns of thinking that get in the way of an executive or manager accepting and acting upon feedback from peers and direct reports:

1. The individual giving me feedback isn’t credible or qualified to evaluate me. (What do they know!) 
2. I’ve achieved success by being the way I am so why would I want to change?

Let’s tackle each of these.
 
First, any person who interacts with you is qualified and capable of giving you feedback about your people skills. The feedback might be related to how clearly you communicate, how responsive you are, whether you are approachable or not and if they feel encouraged and supported by you. If they work with you more closely they can also speak to your technical skills related to completing assignments both accurately and in a timely fashion.
 
And that brings us to the second point. High achievers can hit a plateau where the same skills and approaches they used to achieve their current level of success often work against them in getting to a higher level of responsibility.
 
The most common term for this is “The Peter Principle” where individuals are destined to be promoted to their level of incompetence. Once you reach that level, you are no longer promotable and in fact, your days may be numbered.
 
While the incompetence could be technical, most likely it has to do with your people skills. At higher levels in an organization your success has less to do with your own output and more to do with mobilizing a team to achieve the required results.

Unaware of Strengths
 
In addition to being unaware of our weaknesses, we can also be unaware of our strengths. Without an appreciation of what we do well, we might inadvertantly stop and lose the benefit of that strength. Feedback can reinforce what we are doing well.
 
Confronting Reality
 
When you get to a place where you recognize that no matter how successful you have been, there is always room for improvement, you can begin to make adjustments. In every single coaching situation I have encountered there are only 3 or 4 leadership behaviors that the individual needs to change in order to unlock greater success. The challenge is to discover what those behaviours are and get help to correct them.
 
Reflection Questions
 
Do you actively solicit feedback from the people around you as to how effectice a leader you are? If not can you become vulnerable enough to ask for that feedback and use it to grow as an individual?

Action Items

• Ask for specific feedback from the people you work with and those who work for you if you are in a leadership position.
• While you can use more sophisticated instruments to measure leadership style and management capability, you can start with these four simple questions:
• What do you think I do really well and would like me to continue doing?
• What do I not do as much as I should and you would like to see me do more of?
• What do I do that you think it best that I stop doing?
• What do I not do now that you think I should start doing?
• When you get the feedback, even if you find it difficult to swallow, be thankful because you are on your way to greater success.