Value-based selling is a process of defining the real needs, measurable objectives, possible impact on the potential customer’s bottom line, and pricing accordingly to the value our product can deliver.
Value selling is a hot concept in the technology industry, and one that sales leaders are researching and discussing frequently. Outcome selling is trending on a similar curve. Unfortunately, too many leaders think these two motions are similar and interchangeable.
Cost savings and financial outcomes are only part of the story. In fact, anchoring around value selling can be detrimental to your sales efforts when used at the wrong time and with the wrong buyer.
Here’s an example: let’s say you’re a hardware company selling a new Managed Services offering. You formulate a calculation of how much money a customer will save over the course of the next three years if they pay you to operate their infrastructure rather than purchasing and managing it themselves. Maybe your numbers are solid, and you’re confident you can stand behind your ROI calculations.
Outcome selling is a new and better approach to enterprise technology sales that centers around two objectives:
- Allowing the supplier to demonstrate how their solution contributes to the achievement of the outcome.
- Providing priority business outcomes that your customer is trying to achieve.
Outcome selling is about leading with insights; sharing your knowledge of what other similar companies are doing and then building the connection between your offering and their highest priority business outcomes. And here’s the thing you (the supplier) are providing insight and input as to what those outcomes should be.
It’s not about saying that you understand their business better than they do; that can come across as arrogant and alienating. However, you’re in a position to share your insights and experience based on the fact that you’ve worked with dozens, or even hundreds, of similar companies before. It is obvious why this approach would be far more strategic and valuable to the customer.
Outcome-based selling is about being able to confidently articulate how your solution contributes to:
- Financial goals
- Operating KPIs
- Priority business outcomes
Elevate The Conversation to A Business Level
The first key to effective value selling is to elevate your conversations to business-level discussions. The conventional approach to sales is to identify a problem and sell your solution to that problem. So, if you sell technology that delivers a manufacturing solution, the easy or conventional wisdom is that you go in and uncover problems that you can solve with that solution. Then, you have a conversation with your prospect about manufacturing problems or supply chain problems.
Requalify Every Opportunity in The Pipeline
In any crisis, sales leaders will take stock and reevaluate current opportunities; this is the second key. Lately, we’ve been talking to our clients about their pipelines and the fact that every opportunity must now be requalified. Business priorities have shifted. Staff has changed. Some companies have had to adjust their business models or make changes to their supply chain.
Ask Smart Questions
The third key explains how to best execute point one (driving a valuable business conversation) and point two (continuous qualification). This third key focuses on the questions you ask your prospect and your ability to understand their point of view and circumstances and the context of the issues they face. To gain these insights, you should ask thoughtful, deliberate questions that go beyond merely scratching the surface of open-ended questions. You should prepare to approach a conversation with pointed and specific probing questions in mind, as well as confirming questions to ensure you have a mutual understanding.
By asking smart questions, you can position yourself to direct a value-based conversation. This conversation is not about the product or service you are selling, but instead is a discussion built on questions that uncover your prospect’s point of view around the business issue and how this impacts their position and their company’s results. Asking smart questions also lends itself to establishing your credibility as someone they want to do business with.
Focus on the value of solving their problem
That’s why the first principle of value-based selling is to focus on the value to the prospect of dealing with the issue they have identified. If the prospect cannot articulate the costs and consequences of the problem and the value of solving it, their chances of getting their organisation to agree to invest in any solution is remote as are your chances of winning.
It’s dangerous to assume that your prospect is fully aware of all of these costs and consequences. In fact, a key role of the sales person in these early stages must be to help the prospect recognise the full horror of sticking with the status quo. Almost always, this will involve drawing their attention to aspects of the problem they may not have recognised or even better introducing high-impact issues that they may not have previously been aware of.
But if, despite all your efforts, the value of solving the problem remains unclear or weak, it’s usually best to qualify out the “opportunity” and defer it for future nurturing even if you appear to have a good solution fit.
Be specific about the value you offer
Marketers sometimes make a great deal of fuss about articulating your company’s “unique value proposition”. But no matter how agonisingly carefully they are crafted, these can only ever be generic statements designed to appeal to your target market as a whole. Value-based selling requires that you get very specific about the value you offer each prospect in effect you need a personally tailored unique value position.
Rather than a broad description of all that you can offer, you’ll get much more traction by selectively identifying and highlighting the small subset of your total capabilities that are most relevant to successfully addressing the issue you have identified. And you need to clearly explain how you deliver unique and relevant value to every member of the decision-making team.
Create and capture mutually meaningful value in every interaction
If your contacts are serious decision-makers with substantial workloads, they will not appreciate being involved in conversations and meetings that leave them wondering why they just wasted their valuable time. So, the third core principle of value-based selling is to seek to establish mutually meaningful value in every customer interaction.
This value might be expressed by responding their questions simply, directly and completely rather than leading them around the houses with an ambiguous or deliberately obfuscated response. Or it might be expressed by sharing an insight that causes them to think differently or by revealing a relevant fact they were previously unaware of.
Facilitate their buying process, not your sales process
Conventional sales processes are all-too-often designed around the needs of the seller, not the buyer. So, it’s hardly surprising that things the sales person sees as important are often regarded by the prospect as irrelevant or (even worse) profoundly irritating, while at the same time their interests and concerns are being poorly served by the sales person.
That’s why your sales approach and the key stages in your sales pipeline and CRM system must be designed around the key stages and milestones in your prospect’s buying decision journey. Your sales activities, sales enablement tools and shareable content must be designed to advance a well-qualified opportunity through their buying decision process.
If you can’t contribute distinctive value, qualify out
The final principle is simple: if your solution doesn’t offer a distinctively different and higher-value approach solving to the prospect’s identified problem than any of the other options they are considering, you need to either do something about it or qualify out.