Buyer Insight: The Value Was Always There

0:00The value was always there. Hello. Welcome to the Impact Pricing Buyer Insight Series, where we give you quick but powerful tips on how to understand, package, and communicate your value to maximize your profitability. Today, we're going to dive into a blog mark originally published on June 29th. Buyers don't pay for the value they create. They pay for the value they can see. So, Mark is writing a book called Buyer Disconnect, which is coming out in November. And the entire time that he's been working on it, he kept circling back to one example because it showed the whole problem in miniature. In a single conversation, you have probably had a hundred times. And he wanted to share it before the book comes out. There is a moment in a sales conversation that almost no one notices, because it happens by reflex.

1:03A buyer says what they want, and the seller starts describing the product. It feels like the right thing to do. The buyer asked. The seller answered. But watch what happens to the value of the deal as the same conversation is run five different ways. Each one, a little less about the product, and a little more about the buyer's own situation. The number the buyer is willing to pay does not stay put. And it does not just get bigger. It gets justified. It moves from a figure the buyer discounts to a figure the buyer believes, because by the end, they built it themselves out of problems they can see. So, we're going to show you all about this in one deal. In these scenarios, a company sells a CRM. The buyer is a B2B business doing $40 million a year, closing about 25% of the qualified opportunities there reps work. They are shopping for a C RM because in their words, we're not closing enough of our at-bats.

2:05Same buyer, same product, same price list, we're going to go over five times. The only thing that changes is the conversation. Technique zero. Describe the product. This is where most selling lives. The buyer asks about the CRM, so the seller describes the CRM. It has pipeline management, customizable forecasting, a mobile app, and it integrates with everything you already used, the reporting is best in class, and onboarding is fast. Now, every word is true. None of it has a number attached. The seller has handed over a list of capabilities and trusted the buyer to do the math that turns capability into value. Some buyers can, most can't, and won't. They nod, they file it under, seems capable, and the value of the deal sits at whatever the buyer can assemble on their own, alone from a feature list, which is to say almost nothing. Buyer Disconnect is the gap between the value a company creates,

3:08and the value a buyer can see, believe, and act on. At Technique zero, that gap is at its widest. The product may be worth a fortune to this buyer, but none of that worth is visible. So let's talk about Technique one, the seller's benchmark. This time, the seller says, ah, across our customers, we typically see at least a 5% lift in revenue after the first year. On your $40 million, that's $2 million a year. Now, there is a number, and look, $2 million is not nothing. But notice whose number it is? It is the seller's benchmark. An average drawn from other companies applied to this buyer, like a coat off the rack. The buyer hears it, then quietly discounts it, because they know what it is. It's a claim built from someone else's results. They have no idea whether they are an average company, or a below average, one, or a special case where the number doesn't apply at all. The figure is real, but it isn't theirs.

4:09So they trusted about as far as they trust any vendor quoting their own success rate. The number on the table, $2 million, believed at a discount. Now, Technique 2, the buyer's own metric, moved. So now the seller stops talking, and starts asking, well, what does your current would rate? 25% they say. And then the crucial question, do you think it could get to? The buyer considers and says 30. That number is now theirs. They chose it, so they cannot discount it the way they discounted the seller's 5%. Now the seller only has to help with the arithmetic. What would that be worse to you? They're really working together. The buyer's rep's runs about 1,000 qualified opportunities a year, at an average deal size of $50,000, at 25%, that's $250 wins, which we all know in our head right now is $12.5 million in new business. At the 30% the buyer name, that's $300 wins, and $15 million.

5:12Same pipeline worked better, produces 2.5 million in additional revenue. And a far larger share of it drops to profit, because the cost of generating those opportunities was already spent. Now, the buyer trusts this number in a way they never trusted Technique 1, and for a specific reason, every input came from them. They named the target, they supplied the situation, the seller only helped with the math. You believe in number you built yourself. But be honest about what that number still is. It's a guess. The buyer pulled 30% out of the air, and the guess can land high as easily as low. Had they said $50, the math would have produced a far bigger number, resting on nothing more solid. The number is owned now, which is real progress, but is not it justified. Could that buyer justify that number to their boss? I mean, nothing underneath it explains why 30 is achievable, or whether it's even ambitious enough.

6:12That foundation is what the next two techniques build. Technique 3, the landscape. Okay, so most sellers, if they ever reach Technique 2, stop there. They found a real-own number, and they pitch it. But the win rate is just one problem in a landscape of them, and the CRM solves far more than the one the buyer could need. So the seller keeps asking, and each question surfaces a problem the buyer has, but didn't name. Every one of these gets the exact same treatment as the win rate. Ask the buyer for their current number, ask what they think it could become, and work out together what the change is worth. The principle underneath it is simple and broad. Almost any KPI accompany tracks can be turned into incremental profit, because every operational number eventually connects to revenue raised, cost removed, or risk retired. Take capacity. The seller asks how much of a rep's week goes to administration rather than selling. The buyer thinks and says merely a day.

7:14The seller asks what's reclaiming half of that would do. And the buyer realizes it means each rep could now work more opportunities, and with a thousand opportunities now becoming, say, 1,150, the same improved win rate is applied to a bigger base. They do the math together, and another seven figure number lands on the table owned by the buyer, because the buyer built it. Now the same question runs across the rest of the landscape, each one quantified the same way. Ramp. What does it cost when a new rep gets up to speed, and what's it worth to cut that time? The newty, when a rep leaves, how much pipeline walks out undocumented, and what would the covering that be worth? Forecast accuracy, which is a wrong forecast, cost, and over and under hiring, and what is trustworthy, one worth? Margin leakage. Here is one from Mark's own past. At a company Mark worked with, the same customer would request quotes through different channels, and because no one realized it was the same buyer, they received different prices.

8:16The buyer always took the lowest. Of course it did. A system that simply recognized the buyer stopped a leak, no one had ever put on a spreadsheet. What is that worth? Ask and quantify. Now, none of these was the reason that the buyer came shopping. Every one of them is real. Everyone has a number, and every number belongs to the buyer because they built it. This is breadth. The seller has moved across the KPIs that convert to incremental profit, and help the buyer see value hiding in each. But, every one of these numbers is still the same kind of guess as in technique number two. Better owned, spread across more metrics, but still floating. To truly justify them, you have to go the other direction, not just wider, deeper. And that is technique number four. Underneath one number. Alright, go back to Winrate. The first number the buyer named. The buyer guessed they could move it from 25 to 30.

9:17But neither of you yet knows why it sits at 25, and until you do, 30 is just a hopeful round number. So the seller asks the question almost no one asks. Why 30? What is actually happening in the deals you lose? And here's where the buyer's own situation starts to come into focus. Problem by problem. Each one recognized rather than pitched. Huh, honestly a lot of them just go quiet. The buyer agrees we'd help and then nothing happens. So that means they lose to no decision to the comfort of the status quo. Or maybe they say, my reps can't really explain why we're worth more than the cheaper option. So they have a differentiation problem. Or they say we're great in the demo, but the business case never gets strong enough to defend internally. Ah, a value clarity problem costing deals at the finish. Or deals stall rate after the champion is sold like they're afraid to pull the trigger.

10:18A confidence problem. The buyer afraid of being wrong. Or we waste a ton of time on deals that we're never going to close. That is a discovery and qualification problem upstream of all of it. Okay, watch the buyer as this happens with each problem named two things move at once. First, their trust climbs sharply. Huh, how did you know that? It's the most valuable sentence a buyer can say. Because a seller who can name the problems they live, but never articulate, obviously understands their world. And a seller who understands their world can probably fix it. Second, and this is the part that justifies the number. The buyer can now see the path. 30% stops being a hopeful round number and becomes the visible sum of fixing fine specific recognized problems. And now that buyer revises, looking at the list, they say something like,

11:19if we actually fixed all of that, dirty was conservative. Forty might be real. That is not the seller pushing a bigger number. That is the buyer seeing their own problems clearly for the first time, realizing the upside was larger than their first guess. The number grew, but it grew because the understanding grew and is now grounded in a way that technique two or three never was. That same problem that explain why the number is stuck are the evidence that it can move. Notice the asymmetry that just appeared. There are only a handful of KPIs that convert some money, right? Win rate, ramp, capacity, leakage, forecast accuracy. The many problems beneath them carry the belief. You quantify on the KPIs, but you build confidence on the problems. And the more problems the buyer come to understand, the more they trust that KPI will actually move, and the higher a target they will accept as real.

12:19And we have done this for only one of the five named KPIs, right? We went deep on win rate and never touched ramp, leakage, forecast accuracy, or capacity, each of which sits on a landscape of unnamed problems just as deep. The seller has fully opened exactly one door of five. The value on the table is no longer a figure. It is a landscape, and the buyer is now just beginning to see how far it extends. The value did not grow between technique zero and technique four. It was all there at technique zero, right? The product delivered just as much value. The product was identical the entire time. The buyer was also identical. The price list never moved. Every dollar of value the buyer ended up seeing existed in full while the seller was reciting features at the start. What changed was how much of the value the buyer could see and believe. The seller spent the conversation closing buyer disconnect, moving the value from the company's head into the buyer's one specific owned, recognized problem at a time.

13:27And the value of buyer is willing to pay for is never the value that exists. It's only ever the value they can see and trust. Your job is not to pitch a number. It is to help the buyer understand their situation so clearly that the value becomes real to them on its own. Need help understanding communicating and capturing the value you deliver? Reach out. It's what we love to do. You can reach mark at mark at impact pricing dot com or myself at Rebecca at impact pricing dot com. Now go make an impact.