Understanding your value in a value exchange

It starts with you

I have worked mentoring professional sales people in my various management roles over the years.  One of the things that you often hear in the context of sales is the concept of ‘value exchange’.  It’s useful for us to dive a little deeper into this concept and see how we can use it to our advantage.

In theory the value exchange is when I give you something of value (like my product) and you trade me something of value (like money).  But the actual value exchange in a business environment is far more nuanced.  This is true whether you are in sales or not.  Any and all interactions can potentially involve a value exchange.

How nuanced is the value being exchanged?  It is more than products and services and bags of coins.  I may be sharing my knowledge and experience, which has value.  You may be exchanging your time and trust, which has value.

When you understand these nuances it helps you to position yourself within the value exchange.  It helps you to build a value proposition that goes beyond the product and/or service you are selling and allows you to differentiate your value at a deeper level.

Why do you care about differentiating at a deeper level beyond product and service? Because, in any situation where there is a value exchange market forces will always try to commoditize your value.

Buyers will try to get better economics by standardizing and commoditizing you.  Grouping you with your competition as if there is no differentiating value.  They want to eliminate every value factor, except price, and then force the price down.  If you cannot differentiate your value you cannot expect a premium and it’s a race to the bottom on price.  That’s not a game you want to play in.

Surprisingly, sellers will even commoditize their own value by standardizing their sales process.  The assumption is that a standard process has less cost, more predictability and therefore higher margins in the value exchange.

This is true but only to the extent that the standard process enhances value to the buyer.  It ceases to be true when the standardization removes differentiating value.  You have to be wary of unintended consequences.

What is a poor business person to do in the face of the onslaught of forces trying to commoditize the value exchange?

The solution is simple.  There is one value that is directly under your control that cannot be commoditized.  That is the personal value that you bring to the value exchange.  This is an area that you can always differentiate in.

First you have to do some self discovery to find out what your value is.  What are your strengths?  What are the stories that you are proud of in your history of value exchange?  Where have you made a difference?  This is your unique value.  From this you construct your unique story and approach.

These are the things that you should be practicing and polishing and bringing to the forefront of your interaction with your value exchange partners.  Your knowledge, your energy, your experience, your enthusiasm – are all things that can create a positive value gap above and beyond product and service.

By bringing this added value, your personal value, to the exchange partner they will trade other valuable but intangible goods inturn.  You will gain their trust, their time and access to their world.  And it is in this intangible value exchange that the other, tangible value exchange will be won.

This is something that you continually work on.  You must consistently focus on bringing a differentiated and valuable personal value-add to the interaction.  This cannot be taken away from you or commoditized. This personal value-add is independent of and portable across products and services and companies.

How do you build this value add?

The first step is self assessment.  What are you strengths?  How do those strengths add value in the process?  How does your target audience value them?  What are the examples from your career where you have brought differentiating value to a partner?  Can you tell that story in a compelling way?

What is the difference?

Instead of saying “Hi, I’d like to introduce myself.  I’m Bob and I represent the ABC widget company and we think we have the best widgets in the industry…”

You might say, “Hi, I’m Bob, and when I’m successful I lead my customers through a process where I use my strategic thinking skills to find solutions that they may not even have imagined.  Let me tell you a story… And with your permission I’d like to see if I could do the same with you.”

I’m making this up off the cuff but you get the idea.  If you can change the conversation, humanize it to your specific personal value in the transaction you cannot be commoditized.

Expand this concept of value exchange to your community, your family and your relationships.  How do you stop playing a role that has been defined for you and create your own role that leverages your personal strengths in that process, in that relationship and in that transaction?

If you choose to play along and let the world commoditize you then, frankly, we don’t need you anymore.  We can hire robots and smart monkeys to follow a standard process.  Don’t get caught in that trap.

We may say that we want to commoditize and standardize, but we really don’t.  We want that special value that only you can bring.  We want your strengths and your ‘A’ game because that becomes differentiating value to us on our side of the table.

And that is true value exchange.