How You Are Perceived

One of the biggest mistakes that salespeople make is leading with their product. To understand why, you need to be aware of the four levels of value.

We talk about four levels of value creation. Each level contains the ones lower levels, and transcends them to create even greater value. As you move up through the levels, you are a better salesperson and can better meet your clients’ needs. Once you reach level 4, you can differentiate yourself, gaining the ultimate competitive advantage.

Level 1 Value

Having a product is level 1. If you say, “I create product value, I'm a features and benefits person, I'm going to pitch you, I'm going to show you our catalog, I'm going to tell you what makes us great!” Your prospect will respond by thinking, “Okay. If you're going to be transactional, I’ll transact with you.” You become a commodity.

Level 1 is the lowest level of value that you can create, and it's the value in your product. So no matter how good your product is, when you talk about its features and benefits, you focus on how much you love your product. This type of conversation has very low value for clients.

Everybody has a good product, and everybody says the same thing. Every salesperson who sits across from your prospective client talks about features and benefits. What happens is it's difficult to differentiate yourself from a competitor? Your products and services also start to look exactly the same. In this case, your prospective client looks at you, then they look at your competitors. Everyone looks the same, so what do they do? They decide based on price. And that's how you end up undifferentiated and commoditized.

Level 2 Value

After decades of working on differentiation, many sales organizations try to create a compelling value proposition. This thought process brings them to level 2 value. In level 2 it’s easy to do business because you offer great service and support, and really understand how to make it frictionless for the customer to work with you. This is much better than level 1. You have a great product that works, and you add another level of value to that. But it isn’t enough to prevent you from becoming commoditized, which makes it difficult to win deals.

Level 3 Value

Many companies over the last several decades have figured out how to get to level 3 value, which centers on ROI. In level 3, you show prospective clients tangible results, greater revenue and profitability, lower costs, and greater market share. As a level 3 salesperson, you can show you speed to revenue whatever metrics you need to track By level 3, you can quantify the value that we create and put it on a spreadsheet. Here’s the rough part: Everybody else has got a spreadsheet, too!

Your customers love it when you hand them two spreadsheets (particularly supply chain managers or purchasing people). Here’s the problem, when you walk them through the numbers, you wind up talking about price. In level 3, you have a great product and a great service, and you can show you real tangible business value. But there's still a greater level available to you as a salesperson.

Level 4 Value

Level 4 value means you are a strategic, integrated, trusted advisor, who offers consultative value that you create. This is a totally different level of value than levels 1 through 3. A level 4 salesperson can tell prospective clients, “I can explain how to think about your business in a way that's going to allow you to see around corners, to decide what the future will look like, to beat your competitors, and to avoid certain risks.” These are all the things that you do when you're at your best, when you're a trusted advisor, when you’re consultative, and when you're a strategic advantage for your clients.

The Challenger Sale was such a hot book when it came out because it highlighted the importance of insight. Since at least 2009, I've been writing about business acumen, situational knowledge, and knowing how to talk to a customer about why they should change, how they should change, what trade-offs they need to make. This has been the trend for a long time, so you have to find a way to reach level 4.

When you are level 4, you look and sound different than other salespeople. And then your customer, your prospective client, your dream client look at you through that lens and think, “Oh this is somebody who's strategic and knows how to think about business. This is somebody that I could use to round out my team's thinking because they've got subject matter expertise in this particular area. This is the kind of person that we call for counsel, the kind of person we look to for new ideas to drive our business forward.”

The Message

Your prospective client will accept whatever level of value you show them at the beginning of the relationship and they will meet you there. If you come in with just your product, you're going to be the product guy stuck at level 1. If you’re strategic and consultative, share insights, and present yourself as future-oriented, they're going to accept you as a trusted advisor. You need to play to win, and it starts at level 4. So you need to change your approach, start thinking about creating greater value, and come in with a different pitch. Instead of saying, “Let me tell you about myself, and my company, and my product.” Come in and say, “Let me tell you why you should change, and how to do it.”