Why People Buy – The 5 Levels Of Value

Do you know why your prospects buy? In this post I’m going to explain why your prospects buy products by sharing the 5 step value ladder. The Value Ladder There are only 5 levels of value that you can offer a potential customer. When you offer your customers levels 1,2 or 3 of value you are replaceable. They do not care about you. Your customers will screw you over whenever they can. At levels 4 and 5 of the value ladder however, which I’ll show you in a minute, your prospects will be begging you to work with them. At level 5 the customer will give you every single penny they have, to keep doing business with you. They will beg you for your product! So would you like to be in the position of having your customers begging to give you money, rather than you begging them? Then let's start at level 1 on the value ladder. Level 1 – Meet specifications The first level on the value ladder is when you meet the specifications laid out by your prospect. This is where a prospect is looking for X feature and by chance your product happens to have this feature. Unfortunately, there is nothing to differentiate you from your competition at this level and so wining this type of business comes down to dumb luck most of the time. Trying to hit a sales target when you’re only providing level 1 value is like putting the lottery on and then standing outside their offices, with your hand out, hoping that you win the jackpot. So let's move up the value ladder, to level two. Level two is where you provide a good product to the customer. Level 2 – Good product This is the level of value that everyone thinks they’re sat at. Everyone thinks that their products are great but, in most markets, again everyone’s products are pretty good and so there is very little differentiation. And so again… winning business here usually comes down to dumb luck and the ability to follow up with a prospect often until they relent and give you their money. That’s a tough way to sell each day, right? Level three is when things start to change. Level three is when we start to remove luck from our selling environment and replace it with hustle. We’re at a level 3 of value when we provide a customised service. Level 3 – Customised service This is where we start to differentiate ourselves in the mind of the buyer. This is when they start to say “Oh, Salesman.org is more expensive than reading a few sales books but the training is personalised for me and so I don’t mind paying more”. So, how many times have you battled with prospects on price? They’ll bring up your competitors. They’ll say “I ain't signing no contracts” at the last minute to force you to discount… I’ve been there and it sucks. That pain starts to disappear at level three on the value ladder as in the mind of the buyer, you’re now different to all of the other that are companies pitching them. You now, finally have an advantage. But things really start to fall into the sellers favour though when we get to level four which is reliance. Level 4 – Reliance When you get to this level of the value ladder the buyer-seller dynamic changes. This usually happens in one of two ways – A) Built on top of your product A current customer builds part of their business on top of your product. For example lots of companies use Salesforce.com to store customer data and then build their own marketing and sales systems on top of their platform. If you’re Salesforce.com in this situation you know that there would be so much damn pain for their customer to move to someone else that they’ve basically got the contracts locked in until their customer goes bust. At this point it’d be easier to stop Donald Trump saying stupid things than it would be for a competitor to break into your account and displace you. B) They NEED you for growth Alternatively,