What Are You Really Selling?
At last, you meet your target prospect. You build rapport. When you think the time’s right, you launch into describing your new-to-the-market product, packed with great features no competitor can beat.
Awesome. You’re on your way to a sale, right?
Don’t talk product right off the bat. It’s a classic mistake of newbie salespeople, sometimes even veterans.
First, discuss the business issues the prospect faces and wants to resolve.
When I’m on consulting appointments, I am always amazed at the number of salespeople I meet who are more comfortable talking products instead of business issues.
Today’s blog post theme is value selling. Nothing new, it has been around a long time. Value selling enables your prospect to buy the value your product or service brings, not the product itself.
People don’t buy products; they buy the results the products deliver.
If you accept this truism─80 percent of business comes from 20 percent of your salesforce─ever wonder why it’s true?
That 20 percent represents your value-based sellers. Some members of your team will push for more competitive pricing or worse, the lowest price, to win the business. They’re not selling on value. And we all know the downward spiral of selling purely on price.
Because I devote my practice to growing client revenue, I’m often retained to evaluate the effectiveness of salesforces. That means analysis of people, process, and systems.
We dig deep to understand whether salespeople sell on price or value; we understand quickly which members of your team hold the capacity, temperament, and motivation to become value sellers. In our assessments, we study these factors:
- Compelling Reasons. A salesperson’s ability to uncover the prospect’s reasons to buy, which enables the salesperson to discover the value in the opportunity.
- Value Buyer. When a salesperson buys based on value for him or herself versus price, they’re more likely to sell value. Salespeople who are price shoppers themselves encounter the most difficulty in upholding margins, or creating and selling value.
- Ability to Differentiate. Standout salespeople who make good first impressions inspire their prospects to pay more attention to them than the competition.
- Able to Discuss Money. When salespeople can discuss money confidently, it is easier for them to discuss the solution value they offer, as well as ensure the prospect sees it the same way.
- High Threshold for Money. This factor indicates a salesperson can effectively ask for a lot of money (not to be confused with able to discuss money) without concern for the amount sounding as though it’s “a lot” to him personally.
- Sales-Specific Skills. For most salespeople, more skills lead to more success when they are required to sell value.
While no salesperson is perfect, value sellers close more sales. Even those who aren’t already value sellers can possess the hidden elements to become value sellers. Our OMG assessment reveals the answers to the criterion above, and it lays the groundwork to create a sales process, then train and coach around team members’ DNA and skill sets.
Inside Value Selling
So what does value-based selling entail?
Google value-based selling. Millions of definitions pop up. One definition is Josh Kaufman’s in his bestselling book, The Personal MBA. He says “Value-based selling is the process of understanding and reinforcing the reasons why your offer is valuable to the purchaser.”
In an article for SalesResources.com, Dave Kahle defined the “value” in value selling as something “defined by the customer, not the supplier,” a definition more in line with the traditional “the customer is always right” thinking so prevalent in the customer service industry.
In both examples, authors emphasize what’s important to the customer. However, keep this in mind, both seller and buyer typically negotiate B2B deals. While they look squarely at the return on investment (ROI), it is only one aspect of the full value brought to the prospect.
When a salesperson uses value-selling techniques, he identifies prospect needs, then highlights how the product or service meets and solves those needs; the prospect automatically becomes more invested in acquiring that solution, beyond ROI.
In short, the salesperson needs to follow the prospect’s buying journey. You’ve read this assertion hundreds of times in sales content. But it cannot be overemphasized.
Value-based selling begins with understanding what the prospect wants to fix, accomplish or avoid. Then, it continues as the salesperson assists the prospect in creating the vision for his solution, in part, by positioning the prospect’s current situation as unsafe.
At this juncture, salespeople lose focus.
While many do help the prospect see the need, many more go right into their product pitch. Not a winning strategy. For prospects to see and experience the value the salesperson brings to the table, that salesperson must spend time selling the problem and rendering status quo unsafe.
Apologies for the repetition.
It is necessary. Value selling in this way forms the very foundation of revenue growth.
Once your prospect recognizes the value of first solving the problem, and acknowledges the cost of status quo (with your help), he or she will sense urgency and the need to make a change. Without this critical shift in thinking, your prospects will simply stay with the status quo, giving you a no-decision.
That’s exactly what happens in more than 60 percent of well-qualified sales opportunities today, according to Sales Benchmark. After a long sales cycle, plenty of buyer consideration, and drawing down on company resources, the prospect decides to “do nothing,” at least for the moment.
Okay. Let’s run through this again. To avoid a no-decision, salespeople need to focus first on the value to the prospect of fixing, accomplishing or avoiding the problem identified. Then help the prospect grasp the costs and consequences of staying with status quo.
Now, this is the moment where top salespeople outperform others.
Top performers do not assume the prospect is aware or fully understands all costs associated with failure to fix the problem. In fact, in these early stages, a top performer digs deeper to uncover more nits on the problem.
Don’t misunderstand. The salesperson doesn’t invent these blemishes. His own critical thinking leads him quite naturally to find high-impact issues hidden or overlooked by others. Our value seller then elevates the prospect to a higher order of thinking where the prospect mentally experiences the hazards of sticking with status quo.
If, at this point, the prospect cannot see the value in solving his or her problem, let alone commit to fix it, consider entering the “lose fast” zone. Cut your losses and invest time and resources on more value-thirsty prospects.
Can’t Bring Value? Lose Fast
If your solution does not offer a distinctively different and higher-value approach to solving the prospect’s identified problem compared other options under her consideration, do something about it or lose fast.
Value emerges when you identify a problem the prospect does not see, or you bring a solution he did not consider.
Note in the chart to the right, if the prospect already sees his problem and all you do is fill the need with a solution he already knows about, he will not view you as a trusted advisor who delivers measurable value.
Value Propositions─Front and Center
As I write, I am assuming you have developed a compelling value proposition. Many companies build value propositions and end up with generic statements stuffed with overused superlatives. Pablum to the prospect’s mind. To sell value, you must be specific.
Make it easy for the prospect to embrace your value by defining value propositions in tangible measurements, if possible. Boost sales. Cut expenses. Save time. Speed production. By how much? How far? How fast? Quantify. Quantify. Prospects do not have the time, resources, or vision to search for possible solutions and find the value marks.
For example, through my affiliate partner network worldwide, I bring consulting work, strategy, and training to companies in 64 countries in eight languages. So what? If a financial services firm wants to grow its revenues and train its people in Cleveland, your skill in the Mandarin dialect of Shanghai will not matter.
I know I’m stating the obvious. Have you read any corporate value statements lately. They can be a real slog to get through.
Be specific in defining your value to your target market.
What matters most is my direct knowledge of the financial services industry, its trends and issues, and my proven tools to help the prospect in Cleveland.
Value to Vision: The 74% Effect
By using your value proposition and creating a vision of the solution for the prospect, you show how your product or service solves problems and brings value to his situation. I know this may seem too obvious to many of you. After all, don’t your prospects already realize they need to solve their problems or issues?
Remember top performers know the thorniest pain points often go unresolved─until a sales rep enters the picture. Combine this with the fact that prospects actively seek new solutions at any given time. The good news? Studies by Forrester Research reveal that salespeople who create a buying vision win out against the competition about 74 percent of the time.
What a testament to the importance of shaping a prospect’s vision for a solution.
You win 3 out of 4 times with value selling built around a vision.
To recap the key principles of value-based selling:
- Assess your team’s ability to perform as value-based sellers
- Determine skill sets and DNA as your foundation to develop value sellers
- Build your sales process, systems and training to support your team’s success
Another way to express these principles:
Know what you know
Know what you don’t know
Shore up the gaps
Then do the right action, consistently.
See you on the upside,Bill
For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700