When we talk to potential customers we tend to make the conversation all about us. We talk about our company, our products, and our processes. We fail to see that the goal of a conversation with a customer is to make it all about the customer—their company, their problems, and the better outcomes they seek.
Dr. Lisa Lang says that this is the second common marketing mistake that her clients make: We don’t understand what we are selling.
Customers want value from us, value in the form of tangible results that solve problems. Although results happen to be delivered in the form of our products and services, it’s the experience of results that gets the attention of customers and dramatically increases the price they are willing to pay.
Helping the customer to experience tangible results so they willingly pay a higher price is critical because
Price ≠ Cost
Often we make the assumption that the price of our product or service equals the cost to the customer. However, from the customer’s point of view, their cost often far exceeds the price they pay. The additional costs include the complexity the customer faces in the decision to make and implement a change.
Price + Complexity + Risk/Fear = Cost
The cost of complexity includes the cost of confusion and the cost of customer efforts.
Complexity = Confusion + Customer Efforts
Customers pay an additional cost in the form of risk and fear of change. Not all changes are successful, they impose some level of risk on the customer’s organization and those risks have a cost.
In order to sell more successfully, we have to reduce these additional costs—complexity, risk, and fear. We can only lower these customer costs if we more fully understand and communicate the tangible, measurable outcomes we can produce for our customer.
Dr. Lang explains that we need to thoroughly understand our product and how it is tailored to our customer’s needs. When we communicate our understanding with our customers, they will make new logical connections about their own business. They will see new possibilities for how to run their business and they will become excited that someone could understand their business with such detail and comprehension. When customers make these kinds of logical and emotional connections, they will also see that you have brought down the cost of complexity—costs arising from confusion and customer efforts. Your understanding of the customer needs and the connections that customers make also reduce the risk of the project.
Altogether, your full understanding of what you are selling reduces the customer’s overall costs and makes your price more attractive. When a new possibility emerges, customers realize their total cost is less than the value that you deliver. They are more likely to move forward.