With buyers being informed by the internet and making some 70 percent of their buying decisions before ever speaking with sales reps, salespeople must be more savvy than ever in their understanding of prospect companies and their needs. This depth of understanding is what is referred to as insight selling, and today is the central topic of numerous sales books, blogs, seminars and sales training curriculum plans.
As we’ve been doing in this series on economic principles, we once again turn to the Austrian School of economic thought to extract a principle called subjective value–the perceived value of your product or service in the mind of the prospect.
Subjective Value is Everything
If you really take a close look at it, you’ll realize that subjective value means everything in sales. The value of a product or service means nothing if the prospect does not have their very own mental concept of the value of that product or service to them.
An extreme example of subjective value utilized by economists is known as the “diamond-water paradox.” The value of a diamond versus the value of water would totally depend on the subjective preference of the receiver. If someone were carrying a diamond around in New York City and became thirsty, it is highly unlikely he or she would be willing to trade that diamond for a bottle of water, as water is quite plentiful there and easy to come by. Place that same individual in the Gobi Desert, however, hundreds of miles from the nearest water source and a purveyor of water might well gain that diamond in exchange for water. The subjective value of water for the holder of that diamond is quite high in that circumstance.
Bringing the concept closer to home: If your company sells database software, for example, that makes it incredibly easy for data to be ported from a legacy system into your system, that factor might mean everything to a prospect that has experienced nothing but grief in trying to port legacy data. In his or her mind—or in the minds of decision-makers at their company—that database feature is highly valued. For a company that doesn’t have a legacy system, though, and would be starting new with your product, other database functionality would have a higher priority so the subjective value of the porting feature would mean less to them.
Relevance to Insight Selling
The crux of insight sales is to gain insight into a target company’s issues, desires, and buying patterns as they relate to your offering. That insight is then used to demonstrate how your product or service solves those issues and fulfills those needs, and your sales process can then be conformed as closely as possible to their buying pattern.
As you might have already surmised, the whole of insight selling is utilized to create subjective value in the mind of the prospect. Through your insight, you are demonstrating to the buyer just how valuable your product or service would be to his or her company. That subjective value must also be created in the minds of every decision-maker within that company.
Subjective value is yet another economic principle that has high applicability to sales forces throughout the world. Fully understand it and increase the number of deals your company pulls through the door.
Insight selling is greatly aided by Pipeliner CRM. Find out how by signing up for one of our free webinars.