What is Value Selling and Why you should use it in B2B?
The concept of value selling is not new but there’s still a lot of confusion around it. It’s implementation as a sales methodology still remains a challenge for B2B organizations.
So, to clear the air, first –
What is Value Selling?
When it comes to closing sales in B2B, one should know how to not sell on price, but value. The Sales Guru, Brian Tracy has mentioned that in order to increase sales, the sales professionals must show their prospects that the value of the product offered is much greater than the price asked for it.
Value selling is to identify the needs of the customer, showing them the reason behind why their products cost the way they do and what positive changes the product or service is capable of bringing in the customer’s life.
It’s about the customer’s anticipation that the value or service provided by your company is unattainable in your absence.
Value v/s Price
The price of a product must be seen as one of the features of the product, like packaging, color, size, etc. When value selling is desired as an outcome, price is just one of the product features.
Tom Reilly mentions -“Price is a piece of the sacrifice, not the whole of it. At the heart of buying decisions, customers want great value, not just cheap prices.”
Customer’s sacrifices against the benefits offered by the product are the real “value” of the product. While sacrifice determines the cost and price, the outcome determines the effectiveness of the solution. If Outcome > sacrifice, value is great. But if sacrifice > outcome, the value is terrible.
In today’s gen, if you are still price selling, there’s a high chance you will be out of the race very soon. So, it’s in your best interest to shift to value selling as soon as possible.
And to help you with that, here are a few pointers.
How can you optimize your B2B sales with Value?
1. Create your organization customer-powered
In order to optimize your B2B sales with value, businesses should actively adopt a customer-centric approach and strive towards making an outside-in relationship with the customers.
Each and every part of the company’s value creation process must be in direct relation with the goal of addressing and acknowledging the customer’s challenge.
Often, the offering is based on the internal capabilities of the provider but as the customers are the ones responsible for the success and revenue of the company, it’s better to make them the active players.
The organizational mindset should be to understand what drives the customers’ financial success. The processes, structures, and compensation schemes of the organizations should be aligned to these purposes.
Value selling begins and ends with customers. So, shifting towards a customer-centric approach may seem like a minor change, but a modification of the customer’s role in your organization can make huge differences in the final outcome.
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2. Customize your offerings to solve consumer’s pain points
To identify opportunities, it is necessary to access how similar challenges have different effects on one customer to another. Asking questions like – “Where and how can we soothe pain in the customers’ value creation process?” will be helpful.
Almost all of the B2B companies claim that they understand their customer’s challenges but continuously fail in understanding the intensity of the impact. In order to create a value-adding product, there is an urgent need for two-way communication with the customers. If you want your organization to be customer-centric, you need to understand their value chain, areas of difficulties, and expected solutions to help customize your offering catering to that.
Other than that, to be customer empowered entirely, you must involve customers in the development process via customer interviews, co-innovation, or even co-development. It can also be done by organizing customer workshops or events where you can ask customers with similar challenges to gather and share their thoughts and ideas.
Use their valuable feedback and do short iterations with testing rounds along with the customers. This will not only make the development process more efficient but can also result in cost-sharing of development activities and also help customers identify the value of the building process.
3. Be prepared for intensive cultural changes in the organization
Value selling is extremely time and resource-intensive. It will require intensive cultural changes in the organization with hardcore research and many more pre-sales activities. You must be investing more in understanding the exact needs of your consumers before expecting the revenue.
That’s not all. Even your team will need a revamp and some new skills to be able to adapt to value selling entirely. Give them the desired training and provide all the transformation support because the final outcome is sure to outweigh all your investments required for this process. This is because value selling done well not only creates trust but also helps you build lasting relationships with the customers.
It is also the time to encourage feedback of your offerings and appreciate them. Understand that the development process cannot be static. It is ever-changing as you need to keep making iterations in your offerings in order to match your customer’s evolving needs, compete with the competitors, and stay ahead in the line.
The relationship with the customers can be further developed with increased transparency and showing empathy towards their concerns.
4. Showcase measurable value in form of data, facts, or figures
Value selling requires value communication. It is important to communicate the tangible impact and measurable value of an offering rather than just showcasing the features.
In B2B businesses, the scrutiny of purchases is very high. To be able to successfully make the sale, organizations must be able to measure the benefits of their offerings.
If you can align your case with the customer’s own KPI, there’s nothing like it. Alignment in your own business case with their KPIs can make your message relatable to the customer and also justify the ground on which your offering is built.
In comparison to traditional sales, the need for value communication is more at the higher levels of your buyer’s organization.
Apart from that, even your brand messages and branding must be in direct relation with the value selling principles.
Here’s an example from one of the biggest corporations of the world, Apple: They advertised their iPod as “1000 songs in your pocket” and emerged as a powerful competitor to the MP3 devices having 1GB of storage. Even if the storage space was quite similar, it created an immense difference from the customer’s perspective.
5. Optimize your operative model to support customer-driven offerings
After understanding customer’s pain points and developing customized solutions, the most important step that comes next is to optimize your operative model to support customer-driven offerings.
The way the solution is delivered plays a crucial role in value selling. It requires rethinking the entire operating model to address all the targeted customer’s challenges. Every part of your organization must be optimized to customer’s pain points – right from R&D to delivery to even post-sales support, everything must be about and for the customer. The goal should be aligned with the impact of the solution rather than selling the solution.
You must also leverage technology and automate your delivery to improve reliability, scalability, and profitability. Make greater use of Cloud storage, make data easily accessible within the team with functional softwares, mobile technologies, and digitalization. Technology has created better opportunities for businesses in so many fields and you need to learn to capitalize on it if you want to deliver value.
Alongside the operative model, business and earning models should also be optimized. This integrated approach will pave the way for value-based pricing and also improve scalability which further results in increased profit margins.
Value selling is an entirely customer-centric approach that gives the customers an opportunity to be an active player in the solution development, simultaneously allowing a targeted offering with clear value.
But it depends on your relationship with the customers, business ethics, and also organizational culture. Done well, value selling can be a substantial change for an organization and the much-needed shift to uncover the hidden growth potential.
However, if you are just starting out, it is possible that you are confused about the approach or overwhelmed with the information. In this case, it is best to consult expert B2B sales and marketing consulting firms and seek their professional opinion. Considering this is their core service, they will help you with all the tips and tricks needed with a tangible return.
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