Listen To The Market

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“The single most important decision in evaluating a business is pricing power.”

–     Warren Buffett (b. 1930), one of the world’s wealthiest men, who knows a thing or two about pricing

A neighbor of mine once swore to me that his house was worth 40% more than the market said it was worth.  “Your house is a lot like our house, right?” I said.  He agreed with me.  “Want to know how much they’re worth?” I asked him.  He said, “Yes!”

“They’re worth exactly what someone will pay for them.”

The same is true of our products and services in the markets we serve.

Can we build more value around our widgets?  Of course, we can!  And we should.  Value-add is where the magic is, especially in B2B selling.  Where we get all dorfed up is when we ignore the market. We have to listen to the market.  Unless we’re Jeff Bezos.

Jeff Bezos has built a business around defining markets.  First, books and then everything else we buy.  Unless I need to physically touch a product to evaluate it, I buy it from Amazon, and Jeff Bezos drops it on our doorstep 48 hours later.  Yesterday I bought a Bluetooth speaker, two Mother’s Day gifts, socks and underwear from Jeff.  He’s defined the market for those goods in the eyes of me, his prospect.

If we’re not Amazon, or unless we have the capital, staying power and stones to define a market, or unless we sell something that is materially different or better than competitive products, we have to listen to the market.

That said, the market will tell us the truth more quickly when we ask better questions.

What problem are you trying to solve?  How much will it be worth to you to solve that problem?  Besides the obvious elements of the product, what benefit are you looking to gain?  How do you define value in comparison to your competitors?

I paid $2100 for a brand new lawn tractor three years ago.  Today, I can buy a 4″ bigger deck and more horsepower for $1800, from the same manufacturer.

The market moved.  The dealer might still believe the smaller, slower tractor is worth $2100.  If he does, he’ll be sitting on a lot of tractors and financing a lot of inventory, right up until he is out of business.

We have to build as much value into our offering as we can.  That is our job as sales professionals.  As leaders, we have to listen to the market, so we don’t lose touch with what the market tells us about where our price and our value intersect.

Editor’s Note:  Value-based statement on National Executive Administrative Professionals day — Pam Wilson and Kelly Betts — you’re worth 50x more than I ever could have paid you — and I miss you every day!  Here’s to the value-added behind the scenes and across the board!

 


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