Episode #105: Establishing Value in Sales with Amy O’Connor

Jeff: What is the difference between value and price? And why is that such an important question? We’ll get into it today on, “The Buyer’s Mind.”

Male: Welcome to, “The Buyer’s Mind” where we take a closer look deep inside your customer’s decision making mechanism to reverse engineer the perfect sales presentation. Now, please welcome your host, Jeff Shore.

Jeff: Well, welcome everyone once again to, “The Buyer’s Mind.” I’m your host Jeff shore as we try and figure out, how exactly do our customers think? Today, we’re gonna be looking at what our customers think about value, and specifically, the difference between value and price. Joined as always by our show producer Paul Murphy. Murph, you wanna take a shot at that? What’s the difference between value and price?

Murphy: Price is what you pay for something. Value is what use you get out of it.

Jeff: All right. We’re gonna quote Warren Buffet, always a smart thing to do Murph, had to go to the legends of that. And you’re absolutely right. Price is what you pay. Value is what you get. If I value something really, really highly, I’m just not that concerned about the price. I mean, when the value to me is very, very high. I’m not that concerned. I remember a few years back I was in Paris with my wife on vacation, and man, did I bring the wrong pair of shoes.

I got to the end of day one and my feet were just killing me. I went into a store and I was looking at some shoes. They were fashionable and yet were great for walking. These shoes…these were walking shoes and they were gonna set me back a little more than $200. Now listen, if you’re buying a dress shoe, I get it. But for a walking shoe, man, that seemed like a lot of money until you understand the context. My feet hurt on the day number one of an expensive vacation.

Would I pay $200 for a pair of shoes? I think that that’s what’s really critical about it. I wasn’t paying $200 for a pair of shoes. I was paying $200 so that I would enjoy the rest of my vacation. That’s the difference. Value is what you get, price is what you pay. And relatively that $200 just not that big of a deal. Or, I would look at it this way, Murph, and I don’t think you and I have ever been here. But if you’ve had a heart attack, what is the value of an ambulance ride while you’re having a heart attack?

Murphy: Wow. How do you even put a price on that? And again, you didn’t ask for price, did you? You asked, what’s the value?

Jeff: That’s right.

Murphy: The value is immeasurable. You got to get to a hospital as quick as possible.

Jeff: It is. Sure. The cost is sky high as you’ve mentioned. That’s a very, very expensive transportation right there. You’re having a heart attack. Your life is at stake. The value is what you get. The price is what you pay. If the value is great enough, price is not that much of an issue. As we listen to today’s podcast and our interview with Amy O’Connor, don’t be thinking about cost, especially if you’re in a conversation with your customer.

Don’t be thinking about cost and don’t even talk about cost until you first consider what you are really selling. I don’t care what your product is, what you are selling is life improvement. What you are selling is the way that somebody’s life will get better. That’s all you are selling, is life improvement. I’ve got to figure out, who are you? What is your issue? What is your concern? What is the problem that I can help you solve?

Then when I do that and I show you so much value, now we’re talking about price in context, in the context of value. So often that price discussion takes place in the absence of context. Actually, many retailers do this all the time. They put up a big sign on their front window or store, “Blowout sale, 50% off,” even before there’s any value in any individual context or any context or any individual product.

Now what happens? You’re walking through the door of that store, you’re not gonna pay full price for any item because there’s a bunch of stuff at 50% off. The problem is the stuff that you would find most valuable is the stuff now that you don’t even want because it’s not on sale. I don’t know about you, but the items of clothing that I love the most are the ones I didn’t get on sale. Value is what you get. Price is what you pay. Let’s dive into this and we’ll get into the topic with our own Amy O’Connor and see what she has to say about establishing value in sales.

It is always a pleasure when I have one of my own team on the podcast. I have such a great team. I just love these people so much. Amy O’Connor is just such an incredible asset to the Shore Consulting team. She is client forward. She works with clients all around North America, does such a fantastic job both on their sales strategy and on their sales leadership strategy. We’re thrilled today to have Amy, because we’re gonna get into a big, big topic. We’re gonna narrow it down to some very specific and important points on the subject of value. With that said, Amy O’Connor, how are you today?

Amy: I’m doing fantastic. Thanks Jeff. How are you?

Jeff: Good. Joining us from Virginia, are you?

Amy: I am. It feels like Seattle with all the rain we’ve been having, but yes, I do think it is actually still northern Virginia.

Jeff: All right. Fair enough. You’re not on the road today. Somebody screwed up on the schedule. What’s all that about?

Amy: No worries. I came off the road yesterday. I was in Denver for the past two days.

Jeff: All right.

Amy: Yep. We’re good.

Jeff: Fair enough. Because you spend a lot of time on the road, just before we get into our core topic, how is that, right? I mean, I know how I feel about it, but how do you feel about it? You spend a fair amount of time on the road.

Amy: For me, it’s normal, you know, I’ve been doing this now for almost seven years. Can you believe that? It’s been seven years. Yeah, you know, for me, it’s my pattern. It’s my routine. It’d be hard for me to get off the road, quite frankly. I kind of enjoy having my Netflix and, you know, my pasta in bed at night and I love working with great sales teams. You know, it’s such a dynamic environment to be somewhere new every single week with new interesting teams that have interesting challenges, and really, I absolutely love it.

Jeff: And, you know, we put up with airports and airplanes and all of that because we recognize that every job has its downfall. Just knowing you as I have for years now, Amy, you’re just not really cut out to sit behind a desk all week long.

Amy: No. That would be tough for me. It’d be tough for me to have the same thing every single week. Yeah. New places, new faces, new challenges, it’s what I live for.

Jeff: What kind of gets you excited when you see a really great salesperson and what just drives you up the wall when you see a not so great salesperson?

Amy: Well, I actually had one of them…one of these this week and that’s not, you know, unusual. You know, the really great ones are the ones that are willing to challenge everything it is that they do. It’s like we say at Shore Consulting, “Just put it on trial.” Just because you’ve always done it that way doesn’t mean it’s the best way to do it. You could just be doing things out of habit rather than strategy. My very favorite people to work with are the people who will challenge what it is they do and be open to the idea that there could be a new, better way to try something out. It’s that openness, that desire to learn that really excites me.

What drives me up the wall is really just the opposite. I mean, that person who says, “I’ve been doing this forever. I know what I’m doing. I’ve got it all figured out. Thank you very much.” They’re just very closed off and, you know, at some point there’s only so much you can do to help that person if they’re not willing to be open minded.

Jeff: It’s something that I’m always talking about with the sales leaders in our round table mastermind group that I have the privilege of working with intensely over the course of an entire year. We look at that all the time and we ask, “What are the attributes of a really great salesperson?” For me, number one is achievement drive, right?

They absolutely have to win. Number two is positive energy. They’ve got to be that person that people gravitate towards and really they feed off that energy. Then three, is coachability, because if you show me somebody who’s not willing to be coached then I will show you somebody who has absolutely maxed out. Now, if they’re perfect, that’s one thing but most people aren’t. They’ve got that growth in front of them. I know you and I share that passion for finding people that are really coachable.

Today we’re gonna get into the conversation about a really important…a big topic called value. And right from the very beginning, it’s an interesting word to think about because it’s one of those words that’s easily confused and not just in…I mean, just in any industry you’re gonna find salespeople are gonna say, “Well, we have the best value.” I would immediately argue, “Says who?” Right, because that value is… Well, you and I talk about it from the perspective that that’s a buyer word and not a seller word.

Amy: Yes. That’s really the premise of understanding value. If you’re going to coach value, you have to use the word correctly and the seller doesn’t own value. They never have and they never will. The buyer owns value. We also, I think confuse value with price. They’re not interchangeable. Price is just the number, right? It’s just the price tag hanging off of whatever it is you’re looking at.

Value is the usefulness of a good or a service. How happy does that make me? Value is actually intrinsic. It’s a feeling that someone owns. So this idea that we can create value in a vacuum is ludicrous. It’s not possible because you can’t create value for someone unless you know what they find valuable.

Jeff: You know, it’s interesting we had on the podcast here, Dr. Colleen Kirk and her topic was all around the subject of psychological ownership. There’s transactional ownership when I buy something at the cash register or sitting at the salesperson’s desk, or wherever it is, and I’m writing a check for it. But there’s a sense of psychological ownership that takes place independent of the transactional ownership.

That psychological ownership is really based on the value that I perceive. And in the absence of my version of value, I’m simply not gonna take psychological ownership, which leads us to this discussion of shoes and how you value shoes. And you and I didn’t talk about this up front. I didn’t tell you I was gonna go here and yet somehow, Amy, I think you could probably speak about this conversation.

Amy: Jeff, you know how I feel about shoes. You know I love my shoes and there’s different brands that I find value in and I’m willing to pay for all that value that I perceive in these brands. You know, some of it is comfort and some of it is look. And if we’re really honest, some of it is just the prestige of the brand that I like. You’re right. I mean, when I look at the really beautiful shoe, a really, you know, higher end shoe and I flip it over and I look at the price tag, I have heart palpitations just like anyone. But the way that I get over that is when I slip that shoe on my foot and I walk around the shoe department and I feel really great and other women stop me and they compliment the shoes and, “You have to buy that.”

And, you know, all of this is emotion. All of that is feeling. All of a sudden, that price that I saw on the bottom that was a deterrent maybe for about half of a second that’s gone, because if I can afford the shoe, then it’s never a decision on price. If I can afford the shoe, it is always a decision on value. Does this make me happy enough to purchase the shoe? I think that that’s where some salespeople get misled is they talk about decision making in terms only of price. We have to understand that you never lose a purchase based on price. If your buyer can afford what you are selling, you don’t lose on price, you lose on value if you don’t get that sale.

Jeff: It’s a very interesting take when you look at it from that perspective because you’re saying that value is really an emotional barometer. It relies on the idea of emotional barometer. In the absence of that emotion, there’s really not gonna be a sense of value. The emotion itself adds value, and really in a sense, it adds significant level of value to what it is that we’re trying to do as part of our purchase consideration.

Amy: So much so that you’ll see people pay over retail value for things. One of my favorite questions in my class is I will ask my audience, “Raise your hand if you’ve ever paid over retail value for something.” And at first they look at me like I’m crazy, like, “Who would do that? Why would you do that?” Occasionally I’ll have one or two hands up. But, if I just change the question a little bit and I say, “Well, please raise your hand if you’ve ever been at a sporting event, a concert, or a restaurant and you’ve purchased an adult beverage,” right. Then of course, the crowd laughs and then maybe 5% of the hands go up. And then I look at them and say, “You have paid over retail value for something because you know a beer isn’t $12.”

Why in the world when you’re sitting in a baseball game, do you pay $12 for a beer? The answer is, “Because you just wanted it that much.” You wanted it. It made you happy to sit there. It wasn’t because you’re thirsty. You can get something else. You can get a $5 water. The idea is that when you’re sitting there and something is valuable enough to you, it’s not a price discussion you have in your head. It’s a value discussion.

“In this moment, will it make me happy enough to pay this price?” That’s where the buying decision is made more than sort of this logical trying to understand, “Well, what is the price? Do I wanna buy it? Can I afford it?” It’s much more of an internal and emotional conversation you’re having with yourself on value that then you start to justify the price.

Jeff: You know, it’s interesting because if I sat down at a restaurant somewhere and I’m looking at the menu and I’m like, “Well, what do I want? A cup of coffee is gonna cost me two bucks and an iced tea is gonna cost me two and a quarter.” Then I’ll look at a soda and it’s gonna cost me 6.50, and I’m looking and I’m gonna go, “You’re nuts. You’re craz… What are you thinking?” And yet, if we’re in a movie theater, it’s 6.50 for a soda. You don’t even think twice about it because you have to have a soda, and why, because you had to have popcorn.

Amy: That’s right.

Jeff: That context is critical too, right? Because if the context itself is going to add value, so go back to your shoe discussion here for just a moment, and if I’m looking at… I remember years and years ago I was invited to this party. It was at the House of Blues back when the House of Blues was a new thing and it was like… It was in Beverly Hills. How does one dress for a party at the House of Blues in Beverly Hills, right, way back when it was House of Blues…that was the only House of Blues that was out there.

I remember thinking, “What am I gonna do?” And interestingly enough, I went to pick out some clothes and the salesperson was showing me these shoes and the shoes… It was by far the most important shoes that I would…most expensive shoes than I would have ever bought in my entire life. I just looked and I said, “Man, I just can’t… I don’t know that I can justify spending this much money.” He said, “Well, let me just ask you this, are you comfortable going to the House of Blues in the shoes you’re wearing right now?” And, you know, I looked down and it was, like, it was the biggest no-brainer in the world. There is no way in that context, suddenly it all made sense. It just seems to me that the context of the emotion is in many cases more important than the inherent value of the product itself.

Amy: The context absolutely does matter. That’s where it’s interesting Jeff that you bring up, “Look down, are you going to wear those shoes to the House of Blues?” Because not only is it, you know, this idea of, “I wanna look good.” It’s also the flip side of, “I don’t wanna be embarrassed.” There’s a value in that as well. It’s not just about, you know, what will I get from a new pair of shoes? But also, what will I not have to endure if I don’t do it?

Jeff: You know, this all leads me into this discussion of how we go…it leads me back to the discussion of how value and emotion connect together. Oftentimes it seems to me that we see value as something that we could measure on a spreadsheet, right? I can look at it and I can say, “This is the product. These are the included features. These are the benefits that it’s gonna have to me.” By the time I’m done, I should be very, very logical about this, right. Value seems to be something that I can measure on a spreadsheet. But the way you’re describing it, and I am inclined to agree with you, nothing could be farther from the truth. There’s no way you could truly measure value on a spreadsheet because of the emotional aspect of the decision.

Amy: You can’t do that because you don’t yet know the emotion of the person in front of you, which is why you can never use value appropriately in the absence of discovery. If you haven’t asked your buyer any questions, if you don’t understand what motivates them, what drives them, what makes them excited, what’s important to them, what do they hate about certain things? If you don’t know the answers to those questions, then there is no creating value, because to your point, all you’re now doing is dumping a whole bunch of features on them and hoping some of them hit.

You know, it goes back to something that you say all the time, Jeff, which is you have to know everything but only share what matters. Yeah. If you look at a spreadsheet, if I’m selling a product, I have to know all my features. I have to know, you know, here’s what it has. Here’s what it doesn’t have. It has this new technology. It has this new color scheme. Whatever it is, I have to know all of it. But I only create value when I share what matters to the person in front of me, and the only way to do that is to first start with a strong discovery pattern.

Jeff: How do you do that if your discovery pattern requires you to understand the emotion that underlies whatever the situation is? Whether it’s the dissatisfaction in their life right now, whether it’s the future promise of what they want their life to look like. What you’re suggesting here is that people are gonna make this value decision based on their emotion, right? That’s what you were just talking about. Even with the shoes you’re trying them on, you’re walking around the store, you’re stepping into your own future, you’re simulating what your future is gonna look like. Ultimately, then you’re gonna make the decision based on how you feel, not according to some spreadsheet, but how you feel.

So if this all comes down to our discovery and the way that we get to know our customers, how do we get to know our customers on an emotional level and not simply a statistics or situational level?

Amy: It’s actually not very difficult but most salespeople don’t get there because maybe they simply haven’t thought about it before or haven’t been trained. It’s just looking back at a buyer and asking, “How does that make you feel?” Maybe it’s in terms of, “What do you have now?” Or, “How does that make you feel?” It’s like looking at your shoes, going back to your example, “How would it make you feel, Jeff, if you showed up at the House of Blues in the shoes you’re wearing?” All he simply had to ask you in my hunch is, the word might have been embarrassed. Or then, “How would you feel in these shoes?” “Well, these shoes would make me feel really confident.”

I don’t need to have a pricing discussion with you now. Which would you rather, do you wanna feel embarrassed, or do you wanna feel confident, because the choice is yours, right? That’s a value discussion. To get to the emotion, there’s not some really complex, intricate way. You can simply look at your buyer and say, “Well, how would that be for you? How does that make you feel? How will it make you feel if you do this? How will it make you feel if you don’t?” Then they start to create their own buying path. I don’t have to sell to them at that point. They’re gonna create their own buying path through their own emotions.

Jeff: It’s really taking customers on an emotional journey that helps them to kind of clarify what their value is going to look like in the first place.

Amy: That’s our job, is to bring clarity, you know, we don’t create emotion. We don’t own their emotion. Our job is to make them aware of their emotion and even create…let them create the words. You know, sometimes what I see too is that a salesperson will try to create emotion by telling the buyer how something makes them feel. For instance, “Wow, Jeff, I bet those shoes would make you feel embarrassed.” Well, that might be very off putting to you because that now feels judgmental. I can’t tell you what your emotions are, but I can ask you, “How will it make you feel if you go to the House of Blues in those shoes?” Now, when you say the emotion, you own it. When you own it, you feel it, and when you feel it, that creates the buying path.

Jeff: Let’s talk about how you can build value in what are otherwise perceived as tactical or a logical thing. If you’re displaying something to me, if you’re trying to sell me something and you’re showing me how it works… Like, I’ll give you an example, you know, when I was test driving a car not that long ago, I was made aware of the safety features on the car. One of the things that I have on my car is a lane control correction. If I start to drift in another lane, the car literally pushes me back.

It nudges me back. I can find it if I want to, but it nudges me back. The idea is that if you’ve stopped paying attention or whatever it is, and you know, you’re looking at your map or what have you, it’s gonna keep you from driving outside and into somebody else. Now, that was not on my list of features when I sat down and said, “This is what I want to find.” Yet I still found it valuable. How do you do that? How do you find value and be able to share value in things that otherwise might not be on the customer’s value radar?

Amy: Right. We find that all the time because if you do have something new, they might not even be aware that that is a value point for them. I don’t think that there’s anything wrong with a salesperson saying, “Hey, there’s a really cool new feature. It’s called lane control. Here’s kind of how it works. Do you see this applying to your life in any way?” Then if the buyer says, “Oh my gosh. Yes, if I’m looking down at my map and I could absolutely see that happening. Wow. How would that make me feel?” If you are looking at your map and you, you know, sideswiped the car on the other lane? But if you simply said to me, “You know what? I’ll kind of get really brief, here’s something cool. It’s for you. Here’s what it is. Is that important to you?” And you said, “No.” Then I need to move on.

I don’t get to tell you what’s important to you. If I simply show you something, ask if that’s important. And if it is, then I ask you, “Can you give me an example of how you might use this, where this might be important?” Then follow up with the emotion question. Now I’ve created value in something that you otherwise may not have thought of before.

Jeff: Yeah. You know what’s interesting about that? Let’s role play this real quick. You’re a salesperson and you were going to talk about the automatic braking that this car does when it senses what’s going on in front of it, that a car is stopping short and you are not stopping, the car will brake for itself. You’re the salesperson. You’re gonna share that the way you just did and I’m gonna be the buyer and let’s see where this goes.

Amy: Okay. Jeff, one of the cool, new features on this car may be a feature that you haven’t even considered as being of importance to you is our automatic braking features. Now, what this does is it reads the car in front of you and if you’re going along at a speed that, you know, putting you in danger of hitting the car in front of you, it’s going to automatically brake. I can tell you a little bit more about this if you’re interested, but I just wanna check in, is this something that’s interesting to you in any way?

Jeff: You’re saying that if I’m driving and the car stops in front of me much quicker than I expect and I don’t have time to react or maybe I’m looking at my map or whatever it is, this car will actually brake for me and prevent me from smashing into the back of that car?

Amy: It will. Can you sort of picture, you know, a scenario where that actually might be useful for you?

Jeff: Unfortunately, I very much can. Yes.

Amy: Can you share that scenario with me? What are you thinking now?

Jeff: Yeah, I was actually…it was just horrible. The last time I was in an accident actually it was 20 years ago. Yeah. All the cars stopped in front of me on a busy road and I plowed into the back of the car and it plowed in front of the car in front of it. It was absolutely horrific. The worst part, I was on a business trip and I knew the people in the car in front of me. I mean, actually, it was horrific. It was really, really bad. I look back at it now and I still am haunted by that moment.

Amy: Yeah. Because I mean, how’d that make you feel when you had to step out of the car and look them in the eye? How did that make you feel?

Jeff: Yeah, it was terrible and every time I saw them thereafter. Now, as we’re playing this, by the way, this is not about the podcast. This is Jeff’s cathartic moment here to try and continue to deal with this horrific issue that actually happened. It was horrible and you’re absolutely right, if you’re…you know, for me, it’s not something that I would’ve even known to put it on the list. But when you asked if it was important that it opened up that can of worms, and now, what’s happened Amy? How important is that feature now?

Amy: It’s huge because now you have a story that you personally associate with it. Now you have an emotion behind that. And quite frankly, it’s probably now on your must have list.

Jeff: That’s exactly right.

Amy: This is probably a feature now that if you look at another car and it doesn’t have it, you’re almost like, “Well, I wouldn’t even consider that now. I have to have this.”

Jeff: This is such an important point for everybody to understand, is that we just took that now out of a, “Oh, that’s nice.” Into a must have. And you know what that means? We just eliminated every other competitor who doesn’t have this suddenly must have feature. We narrowed decisively for the customer the type of cars that they’re going to want to see, and why, because it connected to the emotion. Not because it was a cool feature but because it connected to the emotion. If it doesn’t connect to the emotion, then it’s not gonna get you anywhere. That is so very, very cool.

Listen, before we wrap it up, it sounds like this is something you’ve been thinking about a lot, Amy. I love where your head is at these days.

Amy: I’m passionate about this. I could speak for days on the topic of value. I just think there are so many applications for how we can use this and how we can get better with helping buyers make the right decisions for them and feel good about it by using value correctly.

Jeff: And the overriding message is that value is not a seller word, it’s a buyer word. If we recognize that, appreciate that, respect that, then we’ll change our entire presentation in order to figure out the customer’s sense of value, especially their emotional value. And that’s when they accomplish their goals.

Amy O’Connor, just always great. You and I just totally did getting all wonked out on sales theory in general. This is an important topic. I appreciate your dedication to what you want to understand better, and then ultimately, the way that you want to make our clients not just smarter but better equipped to deal with their customers. Thank you so much.

Amy: Thank you. It’s a pleasure.

Jeff: Well, Murph, always good to have our own Amy O’Connor on the show. She’s just not just great energies, just a really smart lady.

Murphy: She is and she cracks me up. I love being on the team with her and I always love to banter back and forth, not only with she and I, but with anybody else on the team. She’s very, very smart.

Jeff: Sure. It’s just really, really good people. There’s no question about it. I love her take that value is an emotional barometer. I thought that…that really stuck out to me from that conversation. That value is an emotional barometer. That my customer wants to be emotionally vested in a product. When you think about it, when we think about those products that we appreciate the most, that we love the most, that we enjoy the most, that we talk about the most, that is what all those products have in common. We are emotionally vested. It’s an emotional barometer in that product.

There are things that I just talk about all the time because I really enjoy them. I really appreciate them. I think about the subscription I have to John’s Crazy Socks, you know, that every month I get a pair of wild socks in the mail. It comes in a little red cellophane package. It’s like opening up a Christmas present. That’s such a beautiful story because they’re socks that I otherwise wouldn’t buy. They’re novelty socks but they’re fun and they make a statement. John of John’s Crazy Socks is a Down syndrome kid whose dad said, you know, “We can make money. He loves socks. We can make money off of this and enrich people’s lives.” These are great. I’m emotionally invested in John’s life.

And so what happens, that emotional barometer, it causes me to value the product more. That’s how we feel about our cars and about our clothes and about our homes, about our jewelry, even just all of the very little things in our life. My coffee machine, I have an emotional investment because I know what it represents. I just wanna challenge you right now as a sales professional. How much are you looking at that emotional barometer as a way to add value?

Because this is the way that we think, we make decisions out of the emotional side of our brain, 85% of that decision is made from the emotional perspective. What happens here is when we unleash our customer to be fully connected into their emotion, what’s going to happen? The perceived value goes up. When that perceived value goes up, then it’s something that I’m saying it’s gonna enrich my life so much that I just have to have it.

At that point, the cost is not nearly as much of a factor. I’m not suggesting we can take cost out of play every single time. The higher the degree of emotional barometer, the higher the emotional barometer, the less that I have to worry about cost, the less nagging that cost is going to be. I wanna challenge you just based on what you heard from Amy today. I wanna challenge you to look at it and say, “What do I do to engage my customer’s emotion?”

That doesn’t mean that we have to be sappy and syrupy and handing them a Kleenex. We have to ask questions that are more…that are much more about their life than about the product. That are much more about their problems and issues than they are about the specifications. That are much more about how a great future looks like than they are about specific features. If we do that right, we have the opportunity to really get them involved in something that they know they’re going to enjoy, because ultimately, the product itself is not a product. It’s life improvement. And that is when we change their world.