What Is Value-based Selling?
Value-based selling is a selling technique that emphasizes the benefits a product or service can have on prospective customers. It takes a different approach than the traditional method of selling, which tends to highlight the features and specs of a product or service.
It is even referred to as consultative selling, as the salesperson here focuses on what customers want and how your products or services can help them. To give you an example, you tell your prospect how using accounting software will help remove duplication of entries and improve efficiency by X%.
With a value-based sales approach, you help your prospect see past the immediate cost to its lasting benefits. The main intention is to guide them through the sales process to make an informed decision that best suits their requirements.
Value-based Selling Methodology
Value-selling methodologies generally fall under four categories. Their classification is done on the basis of the kind of impact it creates.
Here are the broad categories of value-selling frameworks:
1. Qualitative value-based selling
You can't always measure the change in numbers. Sometimes, sales reps need to explain what qualitative benefits a product or service can offer. Understand your prospect’s day-to-day pain points and work on what you can offer to mitigate them.
2. Financial value-based selling
Every company has a lot of revenue to make. If you are able to convey how the usage of your product or service can help generate revenue, it helps examine the value of your product or service. Provide them with some projections on how much revenue your prospect can earn or how much your offerings can decrease the operating costs.
3. Differentiation value-based selling
Here, companies should find a factor that provides them an edge over the competitors. Try to bring out the compelling and unique aspect of your product or service that will align with what your buyers are looking for.
4. Lowered risk value-based selling
If you can offer them something that helps reduce the threat risk and enhances security, it can be useful in effective selling. Businesses can’t overlook the opportunity of reducing potential risks.
How to Build a Value-Selling Framework
A successful framework differentiates value-selling methodology from a simple solution-selling approach. That’s why it’s crucial to build your entire sales process behind it so that you don’t lose sight of it.
Here are the four elements that can help build the framework for your value-selling approach.
1. Know your USP
A unique selling proposition (USP) is the value your business offers that distinguishes you from your competitors. Before approaching your prospect, you must be clear about your product or service's USP.
What sets you apart from your competitors? What value are you offering to your prospects?
With competitors offering similar pricing, features, or solutions, it becomes harder for your company to stand out. That’s why it’s important to highlight your USP to show your offering is a better choice.
2. Know your product in-depth
The next element of the value selling framework is investing time to understand your product in detail. Not every customer will have the same pain points. If you know what your product can do for your customers, you can provide value to them.
Take time to study how your customers' function, review product details with your team and evaluate whether your product can be effective. Learn about your prospects' different sales objections and how to overcome them. Compare your product with that of your competitors.
Learning about your product will help your team provide a genuine sales pitch tailored to your prospects’ needs.
3. Understand your prospect
Chances are your prospects receive sales pitches daily that offer them no value. With all the knowledge that you have accumulated, try to stand out from the pack and give them a reason to buy.
The more time a sales rep spends with the prospect, the better they can know about their unique pain points. Once they have enough information, they can make a compelling, value-based pitch to individual prospects. It increases the chance of conversion.
4. Quality over quantity
The sales process can take longer if you are using a value-selling approach. Value selling takes more time – after all, it’s about making the most out of your sales. Focusing on quality over quantity also helps build a good relationship with your prospects, which results in a higher closing rate and improves the chance of repeat sales.
Take the time to build good relationships and give your prospect the desired attention, thereby improving your bottom line.
Principles Of Value Selling Framework
While every sale is unique in itself, there are certain practices that will help you with value selling.
1. Plan before every call
Before making a call, you must research your prospect enough. This will enable sales reps to provide enough value throughout the sales call.
Here are a few things salesperson should research and be prepared about:
- What are the roles and responsibilities of the person you are contacting?
- What are the ideas they resonate the most with? What do they post on their socials?
- What are their pain points, and what steps are they currently taking to mitigate them?
- What is preventing them from attaining their goals?
If the sales reps have enough information before the call, they can provide relevant value to the prospects.
2. Be a consultant
In other words, don’t try to jump into your sales pitch too early. Even though you might have learned a lot about your prospect during the research period, B2B sales decision-making can be complex. That’s why sales reps should instead try to act as a decision coach for the prospect to help them find the solution best suited to their needs.
In the process, the sales reps provide great value to the prospect during the sales interactions. Allow them to explain their current situation and what they are looking for exactly. When you don’t try to make a general sales pitch, it helps build trust and provides insights into how you can position your product to increase the chance of conversion.
3. Explain how your product will be a good fit
Once a sales rep is aware of the prospects’ current circumstances, the next step is to determine whether their products or services can deliver the value they seek.
There are chances that your company's solution might not be a good fit. If that is the case, learning to walk away from that opportunity and focus on another lead is important.
But if a salesperson thinks that their product will be a good fit, they need to learn to articulate it well to the prospect. Define the benefits your solution can offer. Will it increase their efficiency or reduce their operating cost? Will it help remove redundancy and impact overall work productivity?
Whatever those values you offer, ensure they align with your prospects' needs and solve their pain points.
4. Provide value at each interaction
Every time you engage with your prospect, they tend to leave new information. This could be any roadblocks, their new pain points, etc. Use that information to provide them value each time you engage with them. In other words, make them feel heard and supported so that it helps to build trust and long-term connection.
5. Keep a conversational, personal tone
Today, this point is valid for all types of sales methodology but is more critical for a value-based selling approach. If you want your prospect to share their concerns without hesitation, you must keep a conversational, personable tone when interacting with your customer.
Here are a few tips that might come in handy:
- Always be polite and friendly when engaging
- Ask open-ended questions to get to know them better
- Deliver the value as a consultant and not as a seller
- Ensure that you are listening to them while they talk
Benefits of Having a Value-based Selling Framework
Here are a few benefits of developing a value-selling framework.
1. Increased chance of conversions
Value-based selling approach helps build an engagement with your customer. Developing this engagement can drive their interest in your product or service, increasing the chance of closing the deal.
2. Improved ROI
When you convert an opportunity, customers are completely convinced and have a detailed understanding of your product. Not only does this lead to repeat purchase, but they also act as your brand advocate and recommend it to others.
3. Better sales pitch
Providing value means a sales rep needs to know in and out of your product or service. Developing this framework allows them to better understand your company’s solution by focusing on its USPs. It helps them better position your product from competitors and achieves their targets.
Value-based selling helps find points of differentiation that are crucial in today’s competitive market. By doing proper research, sales reps can identify and focus on selling points and offer the exact value your prospects are looking for.
Equip your sales team with the right tactics and tools that become the core of your sales model and increase the overall efficiency at work.