By Paul Reilly
“You boil things down to the most fundamental truth…and then reason up from there.”
— Elon Musk on First Principles Interview
In this interview, Musk explains how to use the concept of first principles to make decisions. First principles are underlying concepts or beliefs on which a theory, system, or method is based.
First principles are fundamental truths that provide a decision-making foundation. They force you to challenge conflicting assumptions and lead to new possibilities. First principles enable you to create something revolutionary versus another iteration of something already created.
So, what is the first principle of selling? CUSTOMERS WANT VALUE.
Whether in a corporate boardroom or an open-air market, customers want value. Whether it’s our past, present, or into the future, customers want value. Accepting this first principle leads to greater possibilities. Accepting this first principle also leads to better questions that challenge your assumptions. Questions like, “What is value?” and “Who determines value?”
Value is a comparison of what someone sacrifices to what they gain. If the gain is greater than the sacrifice, it’s value. Value is an outcome that buyers gain. It’s experiential and emotional. Regardless of the current economic uncertainty, customers still want value.
The customer defines value, and their definition of value is the only one that matters. Customers don’t care how you define value; they care about their definition of value. Too many sellers tell the customer what value is versus understanding how the customer defines value. Understanding your customer’s definition of value requires deep listening and an insatiable curiosity. Explore your customer’s business with a desire to understand what they care about and what they are trying to achieve.
Embracing the first principle—customers want value—creates a new mindset. This mindset prepares you to manage price objections. When the customer says, “Your price is too high,” do not toil over how much to discount. Instead, you tell yourself, “This customer wants more value.” This first principle provides the foundation to guide your selling effort. Embracing this first principle reveals new ways to create value. This first principle frees your mind to explore new opportunities to create value.