In 2006, Harvard Business Review conducted a seven-year-long study to answer the question: what makes a good salesperson? Over a decade later, the question still rings true. With social media expansion, it seems like everywhere customers look, someone is trying to sell something. Many of these sales only try to convince customers to purchase goods or services without much thought about the future.
Statistics show it's time to move on from a traditional sense of selling. Understanding the components of successful selling is even more critical in today's saturated market. To achieve quantifiable results in sales, a salesperson must connect with their customers at a fundamental level. A good seller must understand their customer's needs and desires more than the customer. That's where the skill of value selling comes into play.
Value-based selling focuses on how the product or service will provide value to the customer. There is a difference between the product itself and its value. A value seller doesn't focus on price but instead on "value-added." Value sellers know how to leverage marketability to increase sales, retain existing customers, and exceed long and short-term goals. And, they do so by connecting the value their company can deliver to the buyer's initiatives. Here's why engaging in value selling can set you apart by bringing in better deals and higher-quality customers.
Understanding the Customer
Paramount to value-based selling is the ability to genuinely understand and connect to customers. If you can't identify a customer's value drivers, you will be less likely to close on a sale. A product or service only has value when a customer perceives it. In value-based selling, it's the seller's job to build that bridge.
Do your research and listen to customer needs. That enables a value seller to focus on primary issues and needs expressed by customers. Engaging in "value creation questions" allows the value seller to paint a big-picture solution for the consumer and articulate the customer's value drivers. Focusing on various needs also enables the value seller to create multiple solutions.
Today's top value sellers can articulate a consumer's value drivers and provide solutions with descriptive value factors.
A value seller understands the concept of value and demonstrates to its customers why it's worthwhile to invest in a particular product or service. Highlighting two or three vital benefits takes more time, but it will produce better results. It will likely close a deal with a higher percentage of sales with better terms and more satisfied customers.
Quantifying the cost is crucial in value-based selling because it gives the customer something to grasp. It shows cost savings or time and productivity gains that your customer can expect.
To start, it's essential to understand that consumer decisions will always be driven by financial metrics. It can either be Return-on-Investment (ROI), Total Cost of Ownership (TOC), Internal Rate of Return (IRR), Payback Period, and Net Present Value.
Value sellers don't assume their consumer knows the value of what their company delivers. They also don't just tell them. Value sellers show consumers the value.
Value is the difference between benefits and costs. There are two types of value: (1) tangible and (2) intangible. Both create opportunities for future economic benefits.
The value in a tangible asset can easily be computed because there is a physical item, either producing or distributing goods or services. Many times, the value of a tangible asset can be measured by its cost. Some examples include mileage per gallon on a car or square footage when buying a home.
Intangible assets are invisible and derive most of their value from expected future benefits. It's much more challenging to sell intangible assets because it involves consulting resources to help in calculating the economic value for products and bridging the gap for the client. However, providing such detailed evaluations for every specific company can be complicated as the caseload grows. It can also be a labor-intensive process as recurring clients come to expect similar analyses yearly.
Companies like DecisionLink, specialize in system designs that relieve some of the labor-intensive burdens of value-selling. For example, some design features can generate value analysis and place value selling capabilities into the hands of every seller, even those who struggle to achieve quotas. Other features – such as sales-enabled platforms – can assist in quantifying and articulating the value a vendor provides. It can do this not just at the initial purchase but throughout the project lifecycle or even the customer lifetime. This enables 'value' and 'outcomes' to be a powerful new lever that scales across the organization to empower all team members.
Know Your Business Value
Understanding your business's USP, or unique selling proposition and value, allows value-based selling to occur naturally. Only when a seller understands the product or service provided can they articulate the benefits to customers. A successful value-based seller will know about the produce or service and why it appeals to targeted customers. Recognizing your USP will also enable you to discuss what sets your company apart from competitors. Appreciating your own USP is the primary point of value-selling.
Value Setting Framework
Statistics show that 93% of buyers want to hear a value proposition early in a sales cycle. Yet, in a recent study conducted by Dimensional Research, over 200 SaaS Sales leaders were asked about their organization's performance. Seventy-eight percent reported that at least half of their sales teams will not achieve quotas.
There may be various reasons why some organizations fail to properly execute value-based selling despite a desire to do so. It may be because of a lack of education or lack of time due to increased caseload. Luckily in today's technological world, there's a solution. Saas can monitor and measure critical data about usage and other business outcomes. Having tools can put value-selling capabilities in the hands of every person to achieve better results.