The way you sell should depend upon whom you are selling to. If businesses in today’s scenario embrace this principle, their selling techniques will have to drastically evolve to appeal to new-age consumers. The consumers of today mostly comprise younger generations such as millennials, who are very aware and opinionated.
Winning them over is no easy task for a business. Even the older generation buyers of today are not satisfied with basic sales methods, because they have a variety of resources available at their fingertips to analyze every aspect of your business and then make an informed decision.
According to studies, consumers are only going to get more selective in their buying habits in the following year. Hence, a business will not be able to attract consumers by limiting itself to traditional selling techniques. It must bring something new to the table; something that can instantly capture their interest and push them toward making a purchase.
But how can a business achieve this?
The solution to this concern lies in value-based selling! It can be the X factor through which businesses can please their consumers because it makes your business highly appealing. The power of value-based selling can greatly scale your sales!
You can also scale your sales by adopting a CRM system such as Kylas, which can optimize your end-to-end operations. It has a robust feature set that can streamline all crucial aspects such as lead management, or field sales management.
What Is Value-Based Selling?
To understand this concept better, let us imagine a sales face-off between two people pitching a co-working space.
Salesperson 1 takes the traditional route. He gives complete specifications of the space, talks about all pricing details, and explains the terms & conditions associated with the purchase.
On the other hand, Salesperson 2 adopts value-based selling. He takes time to understand the exact requirements of the customer and then correlates how the specifications of the space make it the most suitable for those requirements. He also talks about how the space will provide some added advantages for the customer.
Furthermore, instead of simply telling the pricing details, he explains why the price will yield a good ROI in the long run for the consumer. These kinds of value propositions are desired by 92% of consumers in the early stages of the sales cycle. At the end of Salesperson 2’s pitch, the consumer will be left with the idea that “This product is going to really help my business, and I must get it!”
With a value-based approach, you don’t have to sell your product, for it sells itself! It is a sales strategy that prioritizes the needs of consumers and demonstrates how your business is the ideal fit for those needs. It creates a quantifiable value in your customers’ minds regarding the benefits that your product can give them.
Hence, it comes as no surprise that 87% of high-growth sales organizations have adopted this method. Consumers will be eager to close sales with your business, not because they are happy with your pitch but because they believe that it will be in their own best interests.
Value-based selling has a lot of benefits associated with it. Let’s try to analyze all the positive impacts it has on a business.
What Are the Benefits of Value-Based Selling?
Customers are the driving force of any business. Hence, it is a fair assumption to make that any practice which pleases your customers will naturally be good for the success of your business. Since value-based selling keeps your customers’ best interests at the forefront, it has a lot of advantages for your business.
1. Increase in Conversion Rates
A sad reality in business is that up to 79% of leads do not get converted into sales. Nonetheless, you stand a higher chance to achieve lead conversions through value-based selling. One of the most common reasons for conversions to fail is the lack of urgency in the minds of your customers to make the purchase. With value-based selling techniques, your customers will be highly desirous of buying your product, and hence conversion rates can increase.
2. Decrease in Closing Time
For 35% of salespersons, closing is the hardest part of their job, due to the time that it takes and the risk of losing prospects during such time. Value-based selling can reduce the time that it takes to close sales. With the usual sales methods, consumers are not able to see the pressing and immediate benefits that a product can bring them. However, value-based selling changes this mindset of customers too, “The sooner I get this product, the sooner it is going to add value to my business.”
3. Increase in Profits
Value-based selling will provide you with a very good bargaining chip that you can use to drive up your profits. It shows your customers why your product is indispensable to their business, which will make them willing to pay more for it. Over time, you can leverage this to increase the prices of your product and scale your profits.
4. Increase in Customer Retention
Repeat customers spend up to 67% more on a brand rather than new customers. However, you must give your customers a very strong reason to want to make repeat purchases from you. Value-based selling achieves this and hence drives up your customer retention rates.
The significant advantages associated with this process make a very compelling case for why you should adopt it. However, a decision to adopt value-based selling cannot be simply made without considering some questions and learning the proper techniques and processes of it. In the following part of this blog, we will shed some light on the same.
5. Increase in Customer Loyalty
Value-based selling conveys that your brand is interested in more than just making sales and that you are instead focused on resolving the various pain points of your consumers. This will generate a sense of loyalty towards your brand, and studies have shown that 43% of consumers are willing to pay more for the products of brands that they are loyal to.
What Are the Questions to Consider Before Adopting Value-Based Selling?
Prior to making a decision of switching to value-based selling, there are certain questions that you must consider. These questions will reveal certain important aspects of your business and product, which will guide you in the process of correctly making this transition.
1. What is the USP of your product?
This question lies at the core of your approach toward value-based selling. Before trying to make others see the importance associated with your product, you must have a thorough understanding of the same. The USP of your product is what makes it stand out among your competitors’ products, and what makes it special. This USP will ultimately make your product a valuable purchase for your customer.
2. What are the common pain points of your target audience?
While adding value to your customer’s business, your product needs to resolve some of its problems. How can you claim that your product will be a valuable addition till you know these pain points? Hence, it is vital that you identify all the concerns that your customers face prior to taking a value-based selling approach.
3. Is your product benefiting your customers?
After you have zeroed in on the USP of your product and the pain points of your customers, you must find a way to align the two. You must consider whether your product is the ideal solution for your customers and whether it will truly be beneficial for them.
4. Is the price of your product justified for the value that it can give to your customers?
Price is among the most crucial factors upon which purchasing decisions are based. While value-selling to your customers, you must also explain the financial and monetary benefits that your product can bring. Customers need to be reassured that the price they pay will be worth it with respect to the value that your product will bring to them.
The answers to these questions will give you the foundation of your value-based selling approach. However, these are not always easy to find. There are certain techniques that are required to be added to your sales process, which will help you find the answers to these crucial questions and correctly implement a value-based selling strategy.
What are the Techniques of Value-Based Selling?
There are certain techniques that will streamline your value-based selling approach. They will help you make informed decisions and will optimize your sales process in a way that will yield the best results.
1. Conducting Thorough Research Into Your Prospects
The research will give you valuable insights into your prospects. You can gain a lot of essential information such as:
- The demands & preferences of your consumers
- The sales aspects which work, and do not work for your business
- The modifications and improvements that you can bring about to your product based on what your consumers want etc.
With this information, you will not have to approach value-based selling blindly. It will give a targeted direction to your sales activities.
2. Training Your Salespersons to Ask Questions and Be Attentive
Though research is a solid way to find out more about your customers, another way is by directly asking them. Customers are keen to tell their stories, and all they need is someone to listen. A prerequisite for value-based selling is training your reps to ask the right questions and be attentive to consumer demands.
3. Learning From the Success of Others
Your competitors can also provide you with good insights. You must learn the trick of breaking down the reasons for their success, and then learning from the same. You can take inspiration from the factors that have contributed to the growth of your competitors and try to use them in your business too.
4. Creating Good Content
Content has become an integral part of business strategies for 81% of entrepreneurs. It can be very impactful in your value-based selling strategy, as it makes your pitch more engaging and visually appealing. Content is a very powerful medium to convey facts about your product, and it is a technique that can greatly transform your marketing & sales processes.
5. Making All Interactions Meaningful
Another vital technique that you can adopt is to ensure that all your interactions and communications with your consumers are meaningful. A survey showed that 27% of consumers are frustrated by irrelevant marketing content of brands. Your interactions should also be made valuable, by including material that is important for your customers.
Equipped with these techniques, you can now successfully implement the process of value-based selling. What is this process, however? There is no single correct answer for this. There are different processes of value-based selling, depending upon the type of outcome that they offer.
What are the Processes of Value-Based Selling?
It is clear by now that value-based selling entails showing your customers how your product adds value to their business. What does ‘adding value’ really mean though? One business might find a product valuable if it helps in making work efficient. Another business might link the value of a product with the unique and novel features that it comes with. Both these businesses are right in their approach since there can be no concise definition of value addition.
Hence, there are numerous processes of value-based selling, and they each target and resolve separate aspects of a business’s functioning.
1. Offering an Enhanced Quality Product
As elaborated in the example above, your product can add value to your customers in qualitative ways. Under this process, your main goal is to demonstrate to your consumers the advantages of these qualities in your product. You can do this by assuring your consumers that, “This product can resolve the problems in your operations,” or, “This product can help you grow your business.”
2. Offering Products That Stand Out Among Competitors
It is not enough to merely offer a rich quality product if all your competitors are doing the same. In this process of value-based selling, you must communicate why your product is in a league of its own. The value associated with this process is in the fact that your consumers will not find a replacement for your product anywhere else in the market. Your product must be portrayed as the only one of its kind.
3. Offering Financial Appeal
One of the most direct ways in which people perceive value addition is through the financial appeal that it provides. This process entails you taking upon calculations and research to be able to prove, through hard numbers, the value that your product can bring to the customer.
- Revenue and sales forecasting
- Reduced operational costs
- Reduction in personnel training costs
- Reduction in costs due to enhanced sales productivity
are some of the value propositions that you can offer to your customers.
4. Offering Risk Mitigation
Your product will become highly valuable to your consumers if it can help them avoid risks and tackle challenges in their business. Your product must create a smooth-sailing flow of operation and be able to overcome problems as and when they arise. This ease and convenience offered by your product will make it seem like a highly lucrative and valuable addition to your customers’ businesses.
These processes can be adopted singularly or jointly, in order to create a complete and coherent strategy of value-based selling.
An Ending Note
The time for old-age notions of selling has long gone by. Consumers expect and demand more from businesses, and they are looking out for their own interests. In such a climate, value-based selling is an approach that can help businesses align with the evolving preferences of consumers. It helps create a loyal and reliable customer base and can boost your business growth.