B2B companies face a significant challenge in differentiating themselves from their competitors. One solution is to employ a value-based selling approach, focused on identifying and delivering unique value to customers.

In this post, we define value-based selling. We describe its benefits, the fit with the enterprise sales process and implementation issues.

Value Selling Defined

Value based selling is the process of showing a customer where, by using a product or service, they can make (or save) money, gain an advantage over competitors, nullify potential threats, or overcome roadblocks.

The value is obtained in one part of the customer’s organisation or across departments. It can be valuable to one individual (hopefully with influence) or a team. In value based selling, the sales team, backed by their organisation, shows their customer a positive outcome from using their product or service.

To succeed, the sales organisation needs to show they understand the challenges its customers face. They need to know their competitors and market. They should be knowledgeable about what is on the customer’s horizon. What threats lurk out there, and what opportunities? How can the product/service help minimise those threats or convert opportunities?

In value based selling, the first step is to establish the customer need. Only when this is fully understood, is it possible to present a potential solution.

The Advantages Of Value Selling

We covered the shift in supplier vs customer relationships elsewhere in this blog. Customers will not engage with a supplier unless they see value in the relationship. They need to believe a supplier can deliver insights, guidance or ideas in the early stages of a project.

If a supplier can deliver this consultative sales approach, it sets them apart from the competition. Instead of reacting when the customer has decided on a product or service, early engagement allows the supplier to guide (to a point) the selection process.

With value selling, the supplier regains some control. They can implement an enterprise sales process (see below). Most importantly, the supplier can avoid the ‘me too’ sales process when reacting to RFPs when the customer has (almost) settled on a solution.

Fit With Enterprise Sales Process

We defined enterprise sales as ‘a process designed to secure high-value contracts from major customers’….’driven by the release of a major contract.’

Enterprise sales requires intelligence gathering across markets. It involves targeting customers involved in potential major contracts and engaging with the decision-making teams within those customers.

The objective of enterprise sales is to move prospects to the point they are receptive to hearing more. To succeed the sales team must know their value proposition and what makes them different. To remain engaged, they must demonstrate value.

Deeply Understand The Customer

To succeed in value based selling it is vital to deeply understand the customer. Marketing should undertake the same audit process as they would on their own business. This is critical information to fuel the process.

What is the customer’s value chain? What are their strengths and weaknesses? What are their target markets (and why)? What are the threats to the business and who is their competition?

At a people level, who are the key decision-makers and influencers? In most cases, there will be a group of people involved. Remember value is different for different people. Each person will have a perception of risk, both to them and their position (and status) and to their organisation.

Value Selling – Disadvantages

To deliver value based selling there must be some level of initial contact with the customer. If there is no existing relationship, and a level of trust, it will be difficult to engage.

The major potential disadvantage of value selling is it needs a support structure and employees that understand the process and the implications for their specific role. It requires the backing of the entire organisation.

More than that, however, it needs a cultural shift. As the enterprise sales process (of which value selling is a key element) is a long-term exercise, it needs consistent support from senior management. The process needs investment and time to deliver results.

Value based selling requires close cooperation between sales and marketing. Marketing, with help from other departments, must define where the true value of their organisation to its customers lies. Sounds simple, but it is where many value based sales approaches founder.

Finally, there is always the risk a customer will take the initial consultative development work they have completed with a supplier and progress the opportunity with a competitor. It can happen and it is important to be aware of the risk.

Value based selling can deliver a significant competitive advantage. It can lock a supplier into a contract at an early stage. It develops out of an enterprise sales process with contact and trust built over time.

The time to deliver results and the upfront resources allocated to research and customer development is one reason value based selling is not utilised more often. The other is it needs organisational (and cultural) change and that is always difficult to deliver.

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