Selling on Value - The Three Principles of Value SellingPosted on 06/21/2008 in Value Selling Skills
The Difference Between Price And Value
If you are a professional salesperson today, you know the difference between price and value. The challenge is to SELL THE VALUE to the customer. If you can't do this and your sales strategy is based only on "sell low" or "sell on price," you will set yourself and your company up for failure.
In our experience, there is no doubt that the process of selling has evolved. Regardless of whether you are new to sales or are a sales veteran, you must incorporate value added selling into your sales toolkit. To do this, a good starting point is to look at the three key principles behind every value added sales strategy.
Three Principles of Value Selling
Principle #1: Look at value from the customer's perspective.
This is the most important principle because you can't apply the other principles if you don't or can't identify a particular customer's value drivers. A product or service has value only when the customer perceives it to be so. This may sound like common sense, but surprisingly, it is not common practice. Avoid these two common mistakes: first, offering something to a customer that is value-less; and, second giving something of value for nothing.
What are the key skills needed to implement this principle? Quite simply, the ability to ask good questions, what we call "value creation questions," is essential as the first step in your value selling strategy.
Principle #2: Sell to the highest decision-maker possible.
Higher level decision-makers are more likely to appreciate the value elements of your offer. Conversely, lower level contacts tend to look at price and cost only. We realize that you shouldn't ignore lower level customer contacts, but you limit yourself if you don't sell "up."
Of all the principles, this is often the most frustrating and difficult for salespeople. For example, here are some of the challenges that we've heard from other sales professionals:
- how do you identify the key decision-makers?
- how do you gain access to the higher level decision-makers?
- what should you do if a "gatekeeper" is blocking access?
- how do you influence a committee?
- If you succeed in getting in front of the decision-maker, what should you do?
Principle #3: Quantify your value proposition.
After you succeed in getting an appointment with the decision-maker, the last step is to communicate your "value proposition" as persuasively as possible. One guideline that will help you to do this is to use specific, quantifiable terms that are in "units" that the customer will appreciate (such as revenue gain, productivity increases, market share growth, and so on.)
An example illustrates this point. Which of these two statements is most persuasive? Assume that both statements are true and that the same customer is listening to each of the statements.
"We have experience in helping pharmaceutical companies work with regulatory agencies such as the FDA."
"We can generate $30 million in additional revenue for you by accelerating your ability to get new drugs approved by the FDA."
STAR has many resources to help salespeople become better at selling on value, notably our Selling On Value Workshop, Selling on Value Not Price Sales Meeting Kit, 1-on-1 sales Coaching service, and our online training series entitled Needs Based Selling.