Why People Buy – The 5 Levels Of Value

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, you can reach the reliance level of the value ladder by selling into a new organisation, when they need your product so desperately to grow, that without you, their business is likely going to fail.

An example of this would be selling financial services to a startup who needs the influx of capital otherwise their business is going to die. This again makes them reliant on you.

Again, at this point, the buyer wants to work with you, as much as you want the commissions of working with them.

The final level, the God tier of value in B2B sales is level 5, multiple reliance.

Level 5 – Multiple reliance

This is where I’d aim to be with my medical device customers when I sold surgical camera systems.

Sure it’d be great to have 10 operating rooms in general surgery using our equipment. But then when gynecology and urology also become reliant on your equipment and support something magical starts happening…

You find yourself having meetings with the CFO of the hospital, rather than department managers. You find yourself in the middle of conversations about expanding the hospital and their potential equipment needs, rather than hearing about an influx of cash and having to cold call people to learn more…

When you get to level 5 of the value ladder you become a businessperson, not a pesky salesperson, who is always pestering and chasing people down.

Opportunities come to you; your prospects WANT to work with you. Selling becomes fun! How would that change your day to day?

So Will, that’s all well and good, thanks for the theory random 5 level theory… But how the hell do I get to this magical level 5 on your stupid value ladder? That doesn’t even really look like a ladder?

Climbing The Value Ladder

Well if you’re not starting at level 2 which is having a good product the answer is simple. Change jobs. Stop making life hard for yourself. Find the best product in your industry and start selling their sales management on hiring you.

So assuming you’re starting at level two of having a good product, how do we get to level three and offer a customised service?

Lets use the example of me selling medical devices. Clearly I wasn’t able to customise my products to my customers needs. Everything I sold had thousands of hours of research, development and testing before it was even allowed to be marketed and so I didn’t have any leverage to customise at the product level.

So, instead, I customised the service I provided to my customers.

I’d explain the value that I, personally, would add to the prospects in their surgical education, training, hospital business problem solving and more. And honestly, this was all I really needed to differentiate myself from a lot of my competition.

Most of my competition were lazy. They wanted to get in, make a sale and get out. So I took a lot of their business by making the extra effort to play on level 3 of the value ladder.

To get into levels 4 and 5 of the value ladder you need to up your game.

The simplest way to put this is, is that at levels 4 and 5, you must solve your prospects business issues.

This means that YOU personally must be able to –

A) Make introductions

Make introductions within your industry to get your prospects in front of people that can help them move forward.

B) Provide insights

Provide valuable industry insights that the prospect can’t get elsewhere.

For example with the sales leaders that I work with who have their teams in Salesman.org, I can share an incredible amount of information from our SalesCode Assessment data on what traits they should look for when hiring.

C) Tie the wins

What I mean by tying your prospects wins with yours is that you should be looking for ways to help them improve their own customers experiences. If you can do this and improve their revenues directly, you’ll become indispensable to them.

And finally then to go from level 4 to 5 you need to become dispensable across multiple departments within the organisation.

It’s all of course easier said than done but once you retrain your selling brain to focus on the level of value you can give to prospects, rather than focusing on what you can take from them, you’ll find that more and more people want to work with you and the game gets easier.

Summary

To have success in modern sales, you must start at a value level of 3. Then focus on solving real business problems, personally, to get to level 4, then finally do this across multiple departments in the prospects company to become a level 5 seller and really start to win.