Value based selling is a sales approach that reinforces to customers the reasons why your offer is valuable to them. Using this sales approach you focus on the needs of customers first, before the desires of the sales professional.
A requirement for all sales reps in the sales process is to assist the customer in understanding the unique value for the solution/service/product that is being offered. Remember, value is in the customer’s mind and not necessarily in the seller’s.
But what constitutes value? And what does not?
What is Value?
In the business world, value is anything that can make something more efficient, solve a problem, or save or make money. It is all about the motivations for change for a customer, and how they value the change of whatever they are doing to themselves and the company.
Value can be defined in business goals, such as saving costs, or in personal goals, such as getting a business promotion.
What is Not Value?
Value has very little to do with your product or service on a standalone basis. A prospective client does not value you, or what your products/service can do. They do value what you or your products/service can do for them.
Value Based Selling in the Sales Process
There are two important goals in the value based sales process:
- It has to be early in the process.
- It has to be quantified.
Without a mutually agreed value defined early in the process, both the customer and sales rep will get caught up in the following two negative sales conversations that will doom a deal to a pricing game:
- They both will focus on the features of what the sales rep is selling. Both parties will evaluate, conduct a demonstration, compare features to the competition, and generally get lost in feature-based needs. The value that comes out of this war is who is a better fit, but in no way determines the winner.
- Upon winning or coming close in the needs war, the sales team will, near the end of the process, request a meeting with the more senior management of the company to go over the needs of the customer, and how they are uniquely qualified to meet those needs.
Both these discussions distort the value selling framework by focusing on the wrong value proposition. They are focusing on what the product/service can do—its features. The value of a product or service is not its features, but how it can specifically resolve the reason the prospect is making a change in the first place.
To avoid the distraction of the features/benefit focus, the unique value—in terms of the prospect’s needs—must be quantified early in the sales cycle. Get the prospect to put a quantitative value on what a solution can bring to their organization. It can be a dollar amount, a time amount, any unit of measure that is important to them.
This is one of the more useful value based selling techniques, to see if the prospect is just kicking tires or if there is a real business need. Understanding the prospect’s motivation and quantifying it early in the process will tell you if the prospect has a specific value defined—and therefore the motivation needed to complete the buying process.
Without a genuine value, the sales process will slowly lose steam, and “fighting for budget dollars,” “looking at it again,” and “trying to find a good time for us to go forward” will become the norm in the sales conversation.
Getting Their Attention: Establishing a Value Selling Framework
So what should the goal of sales reps be early in the sales cycle to establish a value selling framework? Simply put, the goals are to uncover the business motivation and the needs of the customer. The goals are twofold:
- Educate the customer to understand that you can respond to their list of needs and requirements and thus create more value.
- Educate the customer to understand that you can respond with your products or services to whatever is causing them to change, to do something different—that is, that you will help enable the customer to reach their overall business goals.
Implementing this value based selling approach can improve the sales strategy by establishing a culture of collaboration with potential customers, where their needs are prioritized over a more transactional approach.
Why Sales Reps Should Focus On Value Based Selling
By focusing on value, you analyze your customer’s business and truly understand their needs. Your value-based sales approach helps the customer see why your products or services are valuable to them. By educating customers about value, they can respond quickly to changing market conditions while more easily achieving their own goals.
For any sales professional, value based selling is a great value addition to the sales process. IT will help you to better understand how you can add value for the customer and the solution.
About the author
Skip Miller is President of M3 Learning, a ProActive Sales Management and Sales Training Company based in the heart of Silicon Valley.