Posted in practice on February 24, 2014 5:16 pm EST

Capturing Value

You're creating projects of value, beauty and functionality, now how do you sell them?

If you don’t effectively and efficiently capture all (or at least most) of the value you create, you won’t have a business for very long.


 

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TAGS: business, selling, value,

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By Christian Doering

The financial cycle of any business (even yours) goes through three equally essential stages: value creation, value communication and value capture. Of these, communication—discovering the unique, compelling story hidden in your value creation process, and telling it effectively in properly supportive contexts—is the most often overlooked.

However, we’re going to move on to the third stage, capturing value. If you don’t create value, you really don’t have a business at all, do you? On the other hand, if you don’t effectively and efficiently capture all (or at least most) of the value you create, you won’t have a business for very long.

So let’s assume that you have a marketing communications program, that it’s working and that prospective clients are making themselves known as a result. As soon as that happens, someone is going to have to “sell” them. That someone might even be you. But whoever it is, selling is not enhanced by procrastination: clients don’t like to be kept waiting.

Selling seems to come naturally to some people—not many, but some. They enjoy it, and that allows prospects to enjoy being sold. If you have such a person in your firm, and he or she is honest and trustworthy, you would be a fool not to delegate as much personal selling as possible to that individual.

At the other extreme, a personal sales opportunity can bring on the cold sweats, nausea and heart palpitations. If you exhibit these symptoms, you really have no choice except to find someone to do the selling for you. You simply won’t be able to hide your discomfort, and after a few minutes the prospective client’s main goal will be to end your encounter as quickly as possible. Just saying “No” is usually the best way to do that.

Skin in the Game

The talents that apply to value creation are not the same as those that apply to value capture, and it’s the very rare individual who has lots of both. That’s why selling is so often delegated to salespeople. It’s a reasonable approach, but it does create what some economists call a “principal-agent problem.” Whenever an agent (a salesperson) acts on behalf of a principal (you and your partners), the agent has the option to serve his or her own interests before those of the principal. For example, a salesperson might overpromise because that makes it easier to “close” a sale. Once the client has signed and the commission has been paid, the gap between what the agent promised and the principal can deliver… well, that’s the principal’s problem, isn’t it? If you’re the principal, guess who’s going to have to clear up the misunderstanding/resolve the conflict/make restitution?  continued >>

 

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