How to Sell Value Instead of Price: The Secret to Successful Value-Based Selling
I’ve got some good news and some bad news. The good news is that you can charge more for your products or services when you deliver value; the bad news is that it’s going to take work.
Selling value starts with the sales process
I’ve got more bad news for you. Some people are under the illusion that selling value for certain products or services is different than selling value for other products; it’s not. Management's job should be to define the sales process and define the sources of value for the salespeople. Unfortunately, most sales managers don't define the sales process for selling value, nor provide sources of value, even though they may think they do.
The sales process should start by defining who the ideal prospects are for buying a product based on value. "Know-it-all" customers are not your ideal value buyers; they don’t think they need to pay more for value because they think they know it all. Prospects who are knowledgeable about a range of topics, including their own business, their competition, and their industry, are better candidates for buying on value. They recognize that they don’t have the time to be an expert on everything; they know what they don’t know and they are often willing to pay more for that expertise. That’s value.
Management has a job to do
Management often thinks they're doing their job when they're not. They'll provide specs for products and think that they've provided value, but they haven't. The value that management should provide is helping customers reduce costs, avoid costs, or increase revenue. And to learn this information, management needs to meet with suppliers—knowing the information is not necessarily intuitive.
For example, if you sell petroleum products, your additive suppliers can tell you which of their products do a better job of extending oil drain intervals. This means customers of the oil distributor could reduce maintenance costs by having fewer oil changes. Additional savings could come from the additive doing a better job of providing lubrication; this would translate into longer equipment life and further reduced maintenance costs.
Sales management will not necessarily know this information. They'll need to ask their suppliers for this information, so they can then share it with their salespeople. The more sources of value that sales management is able to identify, the more possibilities there are for salespeople to sell.
Salespeople have a job to do
Once management has identified all the possible sources of value that can be sold, then the salesperson’s job begins. First, a salesperson should identify prospects who will benefit from the sources of value. Next, sales meetings should be set up with prospects to uncover specific areas that can yield reduced or avoided costs, or increased revenue. Once these areas are identified, this will then become the opening for selling specific products which will deliver that value.
Where salespeople often make their first mistake is hearing a customer say one thing, interpreting it as a need, and then immediately making a presentation—it’s too soon. Prospects first need to understand that there is a need, that the need is important, and that they will need to pay more in order to address that need. It’s only when the need is quantified in dollars that prospects will realize they have an issue to address. Salespeople must confirm an issue is important; unimportant issues will get ignored while issues with large dollar amounts will get attention.
You’ve got to prove you can deliver value
Most salespeople come to a value sale with little support that they'll deliver the value they claim. Remember, when a salesperson says something laudatory about his work, it's less believable than if an unbiased person were to say the same thing. This is because it’s in the salesperson’s interests to say nice things about himself. Salespeople who obtain testimonial letters from satisfied customers are more believable; a satisfied customer is perceived as being unbiased with nothing to gain.
The words, “His engineering expertise helped me reduce maintenance costs by $50,000” are more believable when they're said by a customer versus the salesperson. Yet most salespeople don’t have testimonial letters to help them sell; they simply ask their prospects to trust them. That’s a big leap for a risk-averse prospect.
It's much easier to sell value when you can find relevant value, and area able to communicate it effectively to your prospects. The good news is it’s much easier to sell value when you have testimonial letters to support your claim. But don’t look for magic bullets to sell value. Demonstrate that you can deliver value, and then you can look your customers in the eye and ask for a higher price. I predict you will get it.
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