Everyone in sales has one common motive, and that is to sell. Your company has appointed you to close deals, but, at times, selling is not your primary mission. That is where value-based selling comes into the picture. Value-based selling is about benefiting the customer and providing value to them. It is about listening to prospective customers and understanding their needs. Let us know this approach of selling before actually getting into value-based selling examples.
Value-based selling is an approach that aims at benefitting the customer all through the sales process. As per this methodology, sales reps emphasize being consultative and provide value to customers. As a result, customers’ sales decision depends on the possible value the product or service can provide.
It is all about focussing on what customers want, what they are currently experiencing, and how you can help them. Using this approach the right way, you can charge higher prices to customers while keeping them happy as they realize that you are delivering value.
There are many rewards of value-based selling, and if you chalk out your sales process, it will be clear how you can help customers and what the value of your help will be. This selling approach will give you the knowledge of the types of products and services you can create to serve customers better and earn a better profit.
There are several reasons for using a value-based selling model, and they are the following:
With value-based selling, you take the needs and wants of customers into consideration and use them to influence customers’ decisions. As a sales rep, it is about convincing the prospect that your product or service fits perfectly into their needs and is worth the cost.
Value-based selling helps engage prospects and shifts their focus from the product’s price or service to the benefits they would get. As a sales rep, you can use the tactic of value-based selling to impress prospects. As a result of that, they would be impatient to start using your solution. This will help you to close deals faster and at higher prices and ultimately get more enormous profits for your company. You can use the time saved to get in touch with other prospects.
As you address the requirements of potential customers and help them understand the value of your solution with genuine concern, it helps build a strong bond between you and the prospect. When buyers get a product at a cheap rate but don’t know about its value, they don’t think twice before switching to another vendor who gives a lower quote. However, upon using a value-based sales approach, this would not happen. Once you tell customers about the value of your product or service, they will think beyond the price factor when they want to leave you.
To do value-based selling, you have to follow a few principles.
In value-based selling, you have to close a sale by placing the potential customer’s needs first. To do that, you have to understand what their needs are. When you start gathering information about a prospect’s company, you have to know what they do and what their industry is about. Also, try to get to know the challenges they face currently. Once you understand that, you will get to see how you can be of service to prospects.
It may be tempting to pitch your product or service as soon as you spot a prospect, but you must refrain from doing so. Even if you gathered many details about the prospect in the first step, it is better to hear it directly from the prospect. Allow the potential customer to explain what they exactly want. Apart from building trust, it will show that you are genuinely interested in resolving the problems faced by the prospect. This will help in increasing the chances of closing the deal.
The prospect is looking for a new product or service only because they have a few issues to resolve or need to fulfill. To help the prospect understand that your product or service will fix their problem, you have to tell why your product or service will resolve their issues.
You can mention what differentiates you from your rivals while ensuring that your points match the customers’ needs.
By choosing to educate the prospect first, you become trustworthy in their eyes, and they would come to you for advice and information every time. It will eventually make the prospect willing to purchase your product or service because you have already won their hearts by showcasing your interest in resolving the problem.
In value-based selling, you have to act as a consultant for prospects and help them make the right decision. You can behave as a facilitator and offer ideas and strategies but let the prospect make their own decisions. You must give them the steering wheel while helping them with directions. It may seem weird that what is essential for a salesperson is annoying to the prospect. That is one reason you should design your sales approach (also the CRM and sales pipeline) such that it is in sync with the milestones of the prospect’s buying journey.
When you engage with prospects, it is essential to maintain a friendly and conversational tone. It will show that you are not there to make a sale but to help the prospect out.
One great way of bringing a personal touch to your conversation is speaking as though you are conversing with a friend and asking open-ended questions. These are questions you cannot get a simple ‘yes’ or a ‘no’ answer. They should require an explanation from the prospect’s end. However, it should look genuine enough and make the prospect feel that you are interested. You can talk about other common interests you share as well.
Whenever you engage with a prospect, you must add value to build a long-term relationship with them. Another point to note is that people would not be interested in speaking to you without any benefit for them. They would feel that they have wasted their time when they don’t get anything of value in return. So, in every interaction, there should be something of value for the prospect. It need not be materialistic all the time.
You have to make the other person feel wanted. You can do this by letting them speak more during conversations, sharing content relevant to their business, and getting in touch with them often.
You must be raring to know how you can put the principles of value-based selling to practice. Find a few value-based sales examples below that will explain how you should go about applying value-based selling in the real world.
When you talk of the software industry, you must have noticed the use of pricing tiers to sell software platforms. The aim here is to help the purchaser decide the features they need and at the same time help the software company earn large profits.
Consider the example of SalesBlink,
SalesBlink offers value to its clients by giving a special 15% discount on yearly billing. An annual billing fetches you a bigger discount than the monthly billing.
As long as you don’t have to get in touch with your IT service provider, the service they provide is working well. So, how can you place value on IT services? The answer to that would be using an outage. The value of avoiding an outage depends on the meaning of an outage and the company’s size.
Reports say that a network outage can cause downtime of $300k/hour.
This number can vary based on your client.
Here’s is how you can communicate with the client,
You – How much would it cost if there is a network outage for an hour?
Client – I have no idea.
You- Some reports say $300k/hour. Is it so?
Client – That is too high. It must be around $40k
In the above case, you are letting the client set the value by themselves.
Valuing things that have no connection to money can get tricky, and that includes design. The value of such things depends on what the client believes. Also, for design, there may not be a pre-fixed value in the mind of clients. They would fix the price based on previous experiences or would search for the price on the Internet to get an idea.
However, it is up to you to change their perspective. For example, logos must cost more than book covers as they help give brands recognition and don’t change.
You can make value-based selling work only when you get to the bottom of the client’s problem and how they will use your solution.
Selling a logo to Pepsi is of more value than selling the same logo to a tea shop in the neighborhood. There is a tremendous difference in value.
You have to understand the needs of the potential customer and their situation.
Here’s another value-based purchasing example,
Consider a company that requires light bulbs because the previous ones were defective. The sales rep of an XYZ bulb company offers to supply bulbs at $500. However, the budget of the buyer company is only $350. If XYZ company drops the price, the company will not make a profit.
Now, the buyer company knows that they are most likely to get defective products at discount prices. This is where value-based sales techniques work. The sales rep can pitch in the bulbs he has to offer as high-efficiency ones that would last long. Despite the cost being too high, the prospect would show interest if the sales rep stressed the bulbs’ longevity. He can mention that they would use less power than their cheaper counterparts.
The point here is that after listening to so many features, the prospect is less likely to bargain and may close the deal.
It is all about your approach when it comes to selling. The right one can help fetch you higher profits and satisfied customers. That is the motto of most businesses.
If you’re looking to make your customers happy and charge them more by providing value, value-based selling may be the right approach for you. Value-based sales are all about delivering your customer’s wants and needs while educating them on how to get them from you! The key difference between this strategy and traditional sales techniques is that instead of charging prospects with a hard sell early in the process, value-based sellers focus on understanding their prospect’s situation before pitching anything. Once these sellers have learned enough about the prospect’s wants or needs, they move into an educational phase to explain how their product will best fit into those desires.