Linking Pricing Excellence to Customer Value

After spending almost 30 years in the elevator industry, most of it focused on the service business, I find the greatest challenge that our sales people face is not leading a customer discussion with KONE. Our people have been trained on our products and services and that is what they are comfortable talking about.

Unfortunately, these discussions rarely bring any significant value to the customer. Having a background in strategic accounts, I have always realized we need to put the customer’s business processes, activities and challenges out front. Our focus should be on learning and intimately understanding the customer’s business. On a global level, this is surprisingly more difficult than I ever imagined.
The key is providing tools and techniques to help sales people ask the right kind of questions and document the findings. They can then take the learning and apply this to future sales opportunities and actions. This is the first of four steps in truly understanding the needs of our customers. I will review and discuss all four steps at the upcoming conference.

All global organizations face challenges with personnel and competency development. Becoming a truly customer facing organization is really a change in culture and thus becomes an exercise in change management. Two things stand out as critical to this process. First and foremost is executive sponsorship. From the top down the organization must be committed to making the change and it must be part of the discussion each and every day and at all levels. Second, you need strong advocates at the frontline level who take ownership and “champion” the change process.
customervalue2These “Champions” require inspiration, support and tools to be successful in their roles. Rarely will companies have dedicated resources that spend 100% of their time on a change management initiative. They will have other responsibilities and always be pulled in many directions. I will provide some insight and considerations for supporting the success of these important resources to produce a win-win for everyone.

Value creation is only as good as the quantified value you are able to demonstrate to your customers. Quantifying the value of your solutions is clearly the most difficult step in the process. Sales people will naturally gravitate to the soft values which are the most intangible and typically carry the least monetary value to the customer. Challenging your teams to dig deeper and “peel back the onion” will allow for more meaningful quantifications and create real impact to the customer.

Once sales people are armed with the real value your solutions bring, they are now in a position to confidently move the conversation from price to value. Naturally this directly links to pricing excellence. Customers appreciate quantified value because they see what your solution does to help their bottom line and make them more successful. Sales people appreciate quantified value because it supports differentiation and allows them to avoid discounts and even sell at premium price levels. One thing is for sure, if you want to sell value, it is clear that your organization needs to be good at providing meaningful life cycle solutions.

So, if you have great products and services, but find your sales teams need higher discounts to close deals, I can honestly say there is a better way and I will be happy to share what we have learned and put into practice at KONE.

John Lynly

 

 

 

 

John R. Lynly
Head of Segmentation and Value Creation
KONE Corporation