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.
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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.
According to a study, 87% of high-growth companies prefer a value-based approach to sales which is enough to understand the effectiveness of this selling approach.
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. Read our detailed guide on sales engagement tips.
As you address the requirements of potential customers and help them understand the value of your solution with genuine concern, it helps build a relationship 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.
It is best to have a framework to use the value-based selling approach for your product or service. To build a framework that works, you have to focus on 4 elements, and they are the following,
First of all, it is essential to know your product or service inside out. Know all you can about your offering, including the USP or unique selling proposition. Find out what makes you stand out from the crowd of competitors and how your product or service adds value to your potential customers. Before reaching out to the client, it is a must to understand your USP to effectively put your point across.
It is also important to leave no stone unturned to understand the clients’ needs. For that, you will have to do a lot of research and invest time to know how your clients work. After gathering enough knowledge, you can present yourself in front of the clients in a convincing manner.
Once you gather enough knowledge about your product or service and the client, you turn into a resource that clients look up to. Providing value to the prospects has to be the fulcrum of your sales approach, and that is possible only when you work dedicatedly on the 2 elements discussed above. When you reach out to prospects with a meaningful offer, you elevate yourself from others who only annoy clients with pointless follow-up emails.
When you choose the value-based selling approach, you have to roll up your sleeves and get ready to put in more effort. It can be in the form of investing more time to create personalized cold emails or sending extra time on research. It takes more time and energy, but you get a great outcome at the end of it. The focus is on quality rather than quantity, and as a result, you can close more deals effectively and build better relationships with clients, which can help you in the long run.
You can add value to prospects in more than one way, and it is totally up to you to choose which one. Here is a list of where you can value-based selling can have its focus on the following:
There is no need to focus on numbers alone to use value-based selling. Your product or service can offer qualitative benefits, and to work in that direction, you have to understand the prospect’s pain points. Determine how you can remove glitches from their path and what the outcome of that would be. You can show prospects how your offering is easy to use or helps them grow. Stress on what they can gain by choosing your product or service, and you will have a value proposition that attracts prospects.
The value of what you are offering is in a way dependent on the financial benefits it offers. Most companies are looking for products or services that help them scale new heights in the economic area. It is a strong foundation for value-based selling if you can convey that your offering can improve revenue.
Providing customer testimonials to show how much revenue the prospect can generate by using your product or service can take you closer to sealing the deal. Show how your product or service can help the client financially, which is the prime aspect of any business.
You cannot succeed by doing what your competitors are doing. To outdo them, you have to prove how different you are from them and improve the client’s life. In a way, you have to build a distinct identity for your brand and win over the clients.
There are risks in all kinds of businesses, which can worry most business owners. If you can find out what they are, it can give you an opportunity to carry out value-based selling. If your solution can put the client’s fears to rest, they would probably go ahead with your offering.
To do value-based selling, you have to follow a few techniques.
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.
With value-based selling, there comes a responsibility. You pose as an expert and, in a way, make prospects look up to you for advice on how they can improve their work process.
You have to win their trust, and you have only one chance to do that. If by chance, you disappoint them, you can lose the client. The other person will trust you when you show that you are an expert in your field and live up to it. For that, you have to gather as much information as you can and expand your knowledge about your product or service.
At the same time, be genuine. If you don’t know something, be honest and tell them.
It would help build trust and is much better than misleading the prospect.
It is better to avoid being in a hurry to present your sales pitch at the beginning of the conversation with the client. Instead, ask about their needs and the pain points they are currently facing. Listen attentively to learn about the current situation of prospects to work on improving them. It is a good idea to ask a few open-ended questions. Find out the ideal probing sales questions you can ask your clients.
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 neighbourhood. 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.
Here are a handful of companies that have used the value-based selling approach. You can seek inspiration from them.
Microsoft is a large enterprise, and there is no doubt that its products have many takers. While a huge chunk of the population uses Microsoft’s products, it is getting tough competition from Google lately. The development has made Microsoft turn to value-based selling. They offer a free guided tour of each of their products and customize it based on the prospect’s requirements. There is also the provision to connect with the sales team at several points so that the prospects can enjoy individual attention.
Uber is another business that is doing value-based selling right. The company’s headline says ‘Always the ride you want’. There is an emphasis on the disadvantages of other options you have to move from one place to another. In a way, Uber makes prospects realize the inconvenience of using public transport or driving their car. It shows potential customers how hassle-free it is to book a cab on Uber on-demand. And most people agree with what the company says.
Starbucks is easy to spot almost anywhere as they have actively worked towards making their presence felt. There is no doubt that they have loyal customers to make that possible the company stuck to value-based selling. More than the taste of their drinks, they focus on giving their customers an unmatched experience. So people don’t head to Starbucks just for the beverages but to live the experience the coffee chain has to offer. With its ads, Starbucks aims at building a community which is why the coffee chain has returning customers.
Weebly lets its users create a professional-looking website completely free of cost. Thus is not very common in the world of web designing. Weebly sets itself apart from the rest of the contenders in the field by providing two elements to potential users – user-friendliness and growth. You can create an amazing website design with its easy-to-customize templates. Coming to the transactional part, Weebly lets you upgrade to unlock the additional features it has to offer. This way, it does away with the poor image of free tools.
In the B2B space, Unbounce is doing a great job using the value-based selling approach. Its website talks at length about how it helps customers see an upsurge in conversion rates. Unbounce helps build custom landing pages, and the USP is that you don’t require any coding knowledge to design pages. It is quite lucrative to people who don’t have a technical background and would help shed their inhibitions. Also, with a free trial period, they are able to try out the service before they actually pay for it. This approach helps in increasing the number of conversions.
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 sales 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.
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