March 8, 2016

What does Value mean?

Last week I shared a few thoughts around what it takes to be a Sales Engineer in a high tech startup. My last thought, around understanding value, begs for a full post on that subject.

I hear the word value” thrown around so often that I wonder if it has a real meaning anymore. Everyone says their new product or service provides value, but what does that mean?

When I think about what true value means, I approach it from two distinct angles: time and money. No matter who you’re selling to, value will come down to a function of their time and/or money. That’s it.

We pay lip service to providing value for our customer’s time and money but we don’t grasp it completely. If we did, then our success rate for closing deals would be a lot greater than it is. Plus, we’d have happier customers.

Dissecting Time and Money

Let’s dissect both of these two components:

  1. Time - your customer might be under some time constraint. He/she might have to deliver a model, product, or some service to their customers or end users.
  1. Money - your customer is under pressure to increase revenues or cut costs. They have to do more with less.”

I come across these two problems every single time. No one buys a piece of software or service if they didn’t have one of these problems. The hard part for you is to prove to the customer that what you have is the right fit.

How do you do that? Instead of talking generalities in a demo, prove it to them by helping them build a business case.

Let’s take a typical sales pitch I hear all the time.

Our tool you can cut your ETL time in half!”

Ok, everyone says that. What’s so different about that? Does the next vendor cut ETL time by 55%? 55.6%? It’s a fluff statement, devoid of all context and meaning.

The New Sales Pitch

Now let’s look the same sales pitch but framing it into a new context.

An entry level Data Scientist makes around $120,000/year. That translates to $57.69/hr in direct labor costs in your department. If they spend 80% of their time on ETL work (1,664 hrs/yr) and we can cut that in half, you’d save $47,998 in labor costs. Our product/service costs only X% of those savings. With the time you save, your Data Scientist can work on new projects.”

Let’s read between the lines and see what was said. I told the customer that my product has value. I used back of the napkin” calculations to quantify it. Next, I pointed out that it only costs X% of the money they’d save from its use. Plus they could redeploy 832 hours of a data scientist’s time to some other project. You can do more with less.

That’s true value right there. Quantifiable, in context, and meaningful to the customer.

Posted by Thomas Ott /



Sales Marketing Value thoughts Startups


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