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The Value Perception Gap

Even when companies fail to hit their revenue targets, they tend to think that their offerings to the marketplace deliver value of some type. But apparently, that perception isn’t connecting well enough with enough prospects and customers to create a buying decision. In essence, the inherent value of the offering isn’t visible or tangible enough to stimulate action on the part of the buyer. Either they are opting for an alternative or they aren’t buying at all. Or, maybe they are unwilling to agree to a price point that is necessary to sustain acceptable profitability.

A number of industry findings tend to bear out the value perception challenge as illustrated in the figure above. Somewhere between the core value proposition and the point-of-sale, something is broken. The question is, where are the breakdowns occurring and what is causing them?

In many cases, the attempt to resolve a perceived problem is a reaction that is largely focused on the symptom, not on the underlying cause(s) of the symptom. What do we mean by this? As an example, suppose an organization is experiencing difficulty engaging with senior-level executives and accessing buying power consistently. A common assumption might be that salespeople lack the requisite skills to engage effectively with executive buying sponsors. And, that assumption could be 100% true. The reaction to this assumption would typically be investment in sales training on techniques that focus on how to sell more effectively to executives. That might be a great idea – this type of training may in fact be essential, or even critical, in addressing the problem. But, improvement in that area alone might not completely bridge the value perception gap that is preventing more buying decisions. A deeper analysis of the problem might uncover a number of other significant factors at play as well, including one or more of the following:

In other words, before “adjusting the dials,” it is critical to have accurate insight into the causal factors of the problem being experienced.

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