5-minute Review : Selling on Value
By Ian Hirst, Greenbank CEO
As Warren Buffett famously once said: “Price is what you pay, Value is what you get…” We really like this neat definition of value – it’s increasingly at the heart of our consultative selling & negotiation programmes – and equally relevant whether our clients are top 5 consulting firms, SaaS startups or manufacturing companies…
However, whilst the concept itself might be blindingly obvious, like many obvious things, it’s not easy to put into practice! In this short article therefore, we thought it would be helpful to explore…
- Why is value so important?
- What can get in the way?
- How can you make sure you both really understand and then clearly articulate the value you provide?
Why is value so important?
Probably the quickest way to describe this is to look at some real-life issues that recent clients have told us they are facing when they haven’t effectively articulated the value they provide:
Decisions are delayed – a slow-moving pipeline is one of the major issues we are asked to solve – but even when a prospect would personally like to buy from you, if they can’t articulate the tangible value of your solution to key budget holders, it’s all too easy to kick decisions down the road…
Deals are lost to competitors – in today’s fast-moving world, real technical differentiators are wafer thin – so if a competitor is more effective at explaining the business value of their solution, our clients have found that their prospects are more likely to go with the competitor’s offer even if it actually delivers less value.
Negotiations become purely price-focused – obviously if the value you offer is unclear, why should a prospect pay more for your solution? Not only can this result in lost sales (because your prospect perceives your offer to be over-priced) but it makes defending your higher price very tough in negotiations with procurement professionals.
At its simplest therefore, if your solution is not the cheapest, for prospects to buy from you, they need to perceive 2 things…
- The value they will get from your solution is greater than it’s price and other indirect costs
- The value you will deliver is greater than the alternative options to justify a higher price
What can get in the way?
Given the importance of value, what can go wrong?
- Business Developers sometimes don’t fully understand the value their solutions would deliver for a specific prospect. This is particularly the case when they are approached by a prospect asking for a quote or proposal – it’s tempting at this point to focus on describing the solution (assuming they are ready to buy), rather than spending time to fully understand the issues they are looking to solve!
- They may understand the value you provide, but don’t articulate this clearly enough – have a quick look at some recent proposals with a client’s decision-maker’s hat on – is it 100% clear the end business value they will get from going with your solution?
- You may articulate the value, but don’t link this to your competitive differentiators – so prospects can’t justify your higher price.
So, what do top sales teams do? – 3 Top Tips…
Tip 1 – Understand the specific Business Value you can provide
Of course, most business development professionals can explain the potential benefits a client might gain from their service. However, from our experience this is often still one step away from the client seeing the real business value of the offer. For example, a specific technical feature might provide “greater speed” (IT benefit), but this doesn’t immediately translate to a tangible business benefit for the key stakeholder faced with a buying decision.
The underlying issue here is that you are relying on your immediate contact (in this case say an IT manager) to translate to a CFO / CEO why they should pay a premium price for your solution – and why it’s important to do it now. Personally, no matter how professional your clients are, they are not all expert salespeople or influencers! All too often we have seen opportunities stall because a client’s business can’t see the financial justification, even if their main contact is convinced.
The answer of course is that your teams should be able to do that translation for them – e.g.
“This reduced latency would mean that potential customers visiting your web site are more likely to stay around, explore your site and buy from you – in fact from talking with your marketing teams, we agreed that the speed we are proposing could increase your sales by over 20%”.
To do this of course, BD professionals need to move their discussion beyond their main contact (who may not even know the end business impact themselves) and explore business issues with decision-makers in other related functions. There are of course some knock-on benefits of this – as another client recently told their teams during one of our programmes…
“This shift to having business conversations, rather than swimming in the weeds makes selling a lot more fun as well as being more profitable”.
At the end of the day, whoever they are talking to, we have found that top salespeople will naturally be sincerely curious about their client’s business and as a result simply ask better questions, particularly drilling down to understand the negative business impact of doing nothing and the positive, tangible business benefits they are looking to achieve.
If you are clear about both these, then you stand a fighting chance to be able to articulate them!
Tip 2 – Focus your conversations on areas where you outperform the competition
The key skill in a competitive bid is understanding the decision criteria that prospects are using and then actively influencing these criteria so that they are a clear match to your own strengths.
In the example above – if ‘Reduced latency / Increased Speed’ is an area where you out-perform the competition for this deal, then this is the topic you want to be emphasising. Your clients may already see you as strong here – but if they can’t see the tangible business benefits from these strengths, this product advantage is simply not working for you – we call these ‘value sleepers’.
So, the trick here is to make sure you clearly articulate the tangible business benefits to be gained from those areas the prospect already sees as competitive strengths of yours.
Tip 3 – Powerfully articulate this differentiated business value
OK – so your sales teams may now understand the business impact of their solution – and are able to differentiate them from the alternatives the prospect is considering but this is only going turn into increased business if they can articulate the message consistently both verbally and in writing and in a variety of situations – including:
- 1-1 discussions with technical and business heads
- Written proposals and quotations
- Pitches and presentations
Essentially, how do you structure your compelling value proposition and make it memorable? In our Value Selling programmes, we introduce an immediately usable model to help Business Development professionals structure the way they talk about their proposition…
- Business Drivers: What changing in the client’s world that’s making this initiative particularly important now? Showing you understand their overall business and encouraging urgency
- Business Pain-Points & Needs: What are the end-business results they are looking for? Allowing senior stakeholders to see the end-result
- Enablers: What do they need to do differently to achieve the above business results? Clarifying the direct outcomes, they will quickly see from using your solution – and can logically lead to the end business results
- Your Solution: What is it about your solution that will allow them to achieve the above enablers better than alternatives? Bringing out the value of your differentiators…
- Proof: How can you demonstrate that this will work? Ensuring your proposal is seen as low risk…
Value Mapping
This structure is the basis of our full Value Map © tool, which allows both sales and marketing executives to clearly and succinctly bring out the real differentiating business value of your solutions. If you would like a complimentary version of the Value Map, together with instructions for its use, then contact us here
Summary - Don’t talk price – talk value
In every document and conversation, you probably want your Business Developers to be seen as ‘trusted consultants’ rather than coming across as a transactional salesperson – this of course requires a degree of discipline – avoiding the temptation to talk about your company and solution until you have first ‘earned the right’ to do this by showing you understand your client’s business needs. This can be quite a stretch for many sales professionals who are rightly proud of their company and products – but one that can be learned and sustained!
Greenbank and Selling on Value
Over the last 20 years, we have worked with professional services firms, technology companies and sales organisations of all shapes and sizes to develop and sustain a new client-oriented approach to selling – changing the focus of their sales conversations, proposals and pitches, with tangible, measurable results. If you would like to explore how Greenbank might support your organisation, we would be delighted to begin the conversation…. so give us a call Ian Hirst (+44) 7812 074359 or use the contact form below to get in touch.
About Greenbank
Greenbank are an innovative, ‘boutique’ consultancy delivering completely tailored leadership, negotiation and sales development programmes to clients ranging from top 5 global firms to tech start-ups.
We are now delighted to be running truly blended programmes, which make the most of both virtual platforms and interactive face-to-face workshops, to deliver motivational, cost-effective development.
We also have our own industry-leading, multi-lingual, 360° assessment platform, Navigator360 which provides our clients and other training providers with a completely flexible approach to gathering powerful confidential feedback.
If you would like to discuss how we can help your own sales or leadership teams, then we would be delighted to have a relaxed conversation – please contact Ian Hirst or (+44) 7812 074359.