In the latest episode of Aligned, Sean details the different ways businesses, agencies, and companies can provide value to their customers. While multiple models, resources, and methods provide value, people often overlook one approach, particularly in the B2B world: emotional contribution. In a world where financial and strategic value seemingly dominates the B2B world, emotional contribution is an effective and infrequently used solution that separates your business from its competition.
Departing from the diamond-water paradox of value:
In 1776, Adam Smith’s book An Inquiry Into the Nature and Causes of the Wealth of Nations examined the relative value of goods by defining two value perceptions: the value in use versus the value in exchange, citing water and diamonds in his example. Why does society value diamonds more than water despite water being crucial for survival? Unable to determine a reason, Smith questioned why people seek to establish high value for items with little to no practical utility.
While Smith could not determine a conclusion to this paradox, we thank Carl Menger for his theory (published in 1871) which stressed subjectivity: the actual value of a product is found in its least important use. A product that exists in surplus will be used in increasingly diminishing methods of importance, whereas a scarce product will be saved for its most valuable applications. This postulation, deemed the marginal-utility theory of value, resolves Smith’s paradox. Water, in total, is much more valuable than diamonds (because those initial units of water are essential to life.) But because water is far more plentiful than diamonds, the pound-for-pound value of water is significantly less.
The value triad:
Sean discusses three methods to offer value to a customer: revenue gain, cost reduction, and emotional contribution, emphasizing emotional contribution as the way to provide the most untapped value. But despite its seeming lack of use, emotional contribution can be the most influential factor in decision-making. Why? Because people buy from people. We like to think of B2B selling as a business-to-business model (which, quite literally, it is). But in reality, we never sell to the business itself; we sell to a person (or people) within the company. And people are far more nuanced than a company.
People are complex. They don’t want to do things just for the company’s benefit; they want to do things for the benefit of themselves. While a business might look for simply the cheapest or most professional option for a product or service, the emotional aspect of human life drives sales to those who can explain and provide the emotional support needed to influence a decision. But the question remains, how do you know what kind of emotional support to utilize when in a B2B selling position?
Use value mapping to your advantage.
Sean highlights three potential aspects of a buyer’s behavior in the cognitive marketing model: financial pain, strategic pain, and personal pain. Financial pain is simply a need to provide a service for financial ability (by far the most straightforward.) On the other hand, strategic pain isn’t about financial costs but how you can provide strategic value for the business or entity as a seller or outside party. And finally, personal pains are the factors outside the company, but within the individual responsible for the sale. AKA pains that often go unnoticed and unutilized in B2B selling.
Under Karl Marx’s Labor Theory of Value, B2B companies stress the first two pains, financial and strategic, because of their easily measurable value. But personal pain is just as, if not more, influential in a decision. To take this into account, Sean suggests shifting away from the labor theory of value to an emotional contribution model. This allows you to understand why both a company and the individual are buying from you. Understanding this will lead to a continued partnership as you move the needle not just for the company but also for the person you directly work with.
To identify your value map, list your buyer’s journey’s start and endpoints. Fill in the middle with the various steps your client must follow to get from start to finish: inventory, wait times, and exchange of information. To make this map effective, however, you must create it with the goals of each specific company in mind. The results and objectives of your different accounts will vary, and the results and plans of your contact within the organization will change. When creating your map, determine these factors and adjust how you sell to the contact to find more success.
For the vast majority of B2B sellers and marketers, the application of emotional contribution might seem daunting in its subjectivity. It’s not a cut and dry process - the needs of individuals and companies change all the time. And that’s part of the reason B2B companies don’t take advantage of it. But simply being cognizant of it and establishing relationships based on the mutually beneficial applications of the sale for both person and company will forge stronger connections that lead to successful results you deserve.
Looking for more ways to add value to customers through Cognitive Marketing? Check out the podcast series here.