Author: Ed Arnold

One of the keys to implementing successful pricing strategy is equipping your sales team with the proper tools to communicate value to clients and prospects. It is critical for the sales team to focus prospects on the overall value of your product or solution, rather than focusing on price and equating value with discounts or “getting a good deal.” In this article, the author shares five chart formats that can help the sales team communicate value in prospect meetings. Author Ed Arnold is VP, Products at LeveragePoint. He directs product design and development and drives the go-to-market strategy for LeveragePoint. He can be reached at

The Pricing Advisor, March 2016

First impressions matter, especially during an initial meeting with prospective customers. They mat­ter because it’s your best chance to convince customers that your solution can deliver superior value. But exactly how you communicate your superior val­ue is a challenge when a customer seems unmotivated to change or automatically equates value with getting a great deal.

Your first impression needs to grab the customer’s at­tention by demonstrating a compelling value story that ties your solution to their overall business success. A great way to tell the story is with a compelling value chart. Experience has shown that the essential characteris­tics of an effective value chart are:

  • Easy to Understand
  • Shows Them the Money
  • Highlights Your Unique Advantages
  • Opens a Discussion About the Customer’s Issues
  • Easy to Tweak to Reflect the Customer’s Issues (and Your Unique Advantages)

Below are five different charts for taking your prospect’s attentions away from price and focusing it on your competitive value that have been proven effective:

1. The Competitor Hidden Cost Chart

The best thing about the chart in figure 1 is that it tells a nice “you get what you pay for” story. Using this, a sales person can confidently make the claim that their solution actually costs less than the competitor when all the true related operating costs are factored in. A chart like this will certainly catch the customer’s attention and lead to ques­tions about how the additional costs were calculated, which should be provided in other charts or tables. It’s important to keep in mind that although this looks similar to TCO (total cost of owner­ship) charts, there is a difference. Here, the competitor additional cost is really comparative, not absolute. For example, if part of the competitor additional cost is higher fuel costs, then the amount included is the difference between the competitor and our offering – as opposed to the totals for both. In other words, the fuel costs for our offering would not be included in the green bar on the right.

Five Value Charts that Make an Awesome First Impression

2. The Economic Value Estimation (EVE) Chart

The chart in figure 2 is an excellent choice if your customer is already famil­iar with value charts such as large OEMs who buy from specialty materials and component manufacturers. Based on the Economic Value Estimation (EVE) methodology, this chart’s key feature is the highlighted differentiation value area (light green) and $ amount, which imme­diately steers the conversation away from your offering price (in fact offering price is absent from this chart). It also sets the stage for a deeper conversa­tion about the specific sourc­es of the differentiation val­ue, namely the specific value drivers (dark green steps). As you can see in this ex­ample, increased productivity is a huge value contributor, therefore an obvious place to begin the value discussion.

Five Value Charts that Make an Awesome First Impression

3. The Value to Customer Chart

The chart in figure 3 is a re­cent innovation developed after feedback from the pricing commu­nity. It combines the best attributes of the previous two charts, namely the spe­cific value drivers and side-by-side price comparisons. A key feature of this chart is explicitly calling out “value to cus­tomer.” Using this, the sales person can confidently say that the customer gains much more economic value (shows them the money) by using our offering even at a slightly higher price.

Five Value Charts that Make an Awesome First Impression

4. The Multi-Year Financial Chart

The chart in figure 4 works best when your offering is a multi-year capital expenditure. It combines the tradi­tional financial-based investment approach with a value dimension that ap­peals to financial decision makers because it uses standard metrics of pay­back and net present value (NPV). So it’s a format that is easily understood by these stakeholders. This chart clearly distin­guishes initial outlays ver­sus annual costs/value to customer. At the far right there is a dark green bar which shows total value to customer, which can lead to a more in-depth discus­sion about specific value drivers.

Five Value Charts that Make an Awesome First Impression

5. The Total Cost of Ownership (TCO) Chart

Total cost of ownership (TCO) charts, as seen in figure 5, are widely used across industry to show cost comparisons be­tween two (as well as three or more) alternative solutions. All acquisition-related and operating costs are stacked up and displayed side-by-side. The vi­sual implication is that the shortest stack wins and therefore this makes the value story telling a very easy task. So for sim­ple annualized cost comparisons this chart is excellent. However one draw­back is that it does not handle either rev­enue value drivers, or less tangible driv­ers, like risk, very well.

Five Value Charts that Make an Awesome First Impression

In Conclusion

Choosing which chart is best for your of­fering depends in part on your customer and sales process. Some field testing and refinement may be required before you hit upon the right portfolio of charts. Often we find that chart styles evolve over time, so be open to continual im­provement.

Therefore, the right marketing and sales tool is essential for producing these types of charts on a timely basis and linking them to other materials.

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