28 Jun Some Thoughts on Selling on Value in a Price Conscious Market
With the recent glut of mergers and acquisitions and the trend of combining payments with other products and services, there is a renewed focus on selling on value. Here are a few thoughts that might be helpful to those treading the value selling waters.
You may be surprised to see price as the first item in the list. Price is not supposed to be a factor if you are selling on value. In fact, one of the taboos of value selling is to never mention price in your early discussions. However, price is always one of the determining factors when closing a sale so it is important to understand the price of your product versus the value that it brings to the customer.
So, what is ‘value’. That’s one of most challenging aspects of value selling – determining what the actual value of your product is to your customer. I am italicizing customer here because many companies identify value based on their perception and not the customer’s. You’d be amazed how often those two viewpoints do not align.
By definition, value is the difference between the price you charge and the benefits the customer perceives they will get.
Of course, one of those benefits may be price. If it is, use it to your advantage but don’t make it the focal point. Otherwise, the more tangible benefits of your product will be overlooked (and undervalued). As every sales person knows, there is always a competitor willing to offer a lower price.
In order to sell on value, you not only have to be able to explain the benefits of your product in relation to the customer’s needs, you also have to be able to differentiate the benefits of your product against other vendors selling similar solutions.
To effectively do this, a sales person needs to really understand what those benefits are. One way to learn them is to write down ways, big or small, that your product helps your customers. And don’t just regurgitate the marketing slicks – spend some real time thinking and researching. This will not only help you to fully understand your product and your customer but will also get you more involved in the product roadmap – feedback from sales and customers is crucial to keeping a product viable.
Do the same for differentiation. Don’t be afraid to include everything and anything. And not just features/functions – get into the nitty gritty – how was it developed, where is it produced, how is it supported. Basically, anything that’s interesting or different. Some of it won’t be appealing to your customers but all you need is a couple key points that strike home to make an impression.
Educate Rather Than Sell
Selling on value requires a certain skill level. We’ve all heard the term ‘consultative sales’ and every good sales person understands what it means. However, being able to practice it is another story. It requires a thorough understand of your product, your customers, your industry, current trends, and so forth. Good sales people are like good students – they are continually learning and eager to expand their knowledge. To be successful in today’s market, a sales person needs to become an educator of the customer helping them learn what is important to them and their business.
Another term you’ve heard a million times – ‘Listen before you Speak’. But what does it really mean? And why is it important in value selling?
Because if you take the time to ask the right questions and listen, really listen, to the responses, you will find that many times a customer will not only tell you what their needs are but also what your value is.
Huh? Yes, it’s true. Actually, what they’re telling you is the value of solving their problem. As long as the benefits of your product meet their criteria, you won’t have to sell them on your value. They just told you what it was!
The truth is, you don’t need a glitzy sales pitch or to slash the price of your product to beat out your competitors. Your success will depend on how much value you can add to your product and how well you can articulate what that value is and how it can help your customer.
Marketing material is an important asset but most companies tend to overstate their products and position – global leader, unparalleled service, best-in-breed – these statements are overused and to be honest, most customers just ignore them. If you happen to actually work for a global leader then great, promote it. However, if you focus your energy on understanding and promoting the value of your products and why they are important to the customer, you will find an attentive and captivated audience.
Heck, they may even get interested enough to read your marketing literature!