As a sales professional, your job is ultimately to sell, but that doesn't necessarily have to be your main mission. Enter something known as value-based selling (also known as value-added selling) — the process of taking a consultative approach to sales and conveying the value of a product or service along the way.
Here, we'll take a closer look at value-based selling, explore its principles, check out the value selling framework, and go over some examples of what it might look like in practice.
Value-based selling is an approach that focuses on benefitting the customer throughout the sales process. Sales reps focus on taking a consultative approach to provide value to the customer so the sales decision is made based on the potential value the product can provide.
The goal with a value-based selling approach is to put the needs of the customer first, guiding them through the sales process to make an informed decision to best suit their needs (ideally, leading to the purchase of your product). This creates anticipation for the positive result having your product will provide in the mind of the customer.
Many prospects are constantly bombarded with messages pressuring them to buy. Stand out from the competition and create long-term happy customers by providing more value than anyone else.
Principles of Value-Based Selling
1. Do your homework.
Remember, the goal of value-based selling is to close the sale by putting the needs of your prospect first. However, you can’t put your prospect’s needs first if you don’t know what those needs are. Always do your homework to understand your contact — usually well before hopping on a sales call.
When researching a prospect, aim to understand their company and industry, background, and current pain points. By understanding these pieces of information, you’ll have a solid grasp of how to serve them best.
Here is some information you may want to consider looking for as you prepare for your call:
- Their current role and previous job experience — A simple LinkedIn search can help you learn about your prospect’s career history. Are they new to their current role? If so, they might still be ramping and could benefit from learning from you. Is this their first time making this type of purchasing decision or have they been in similar roles? If they have experience in this area, they may be more interested in expediting the process, so you can better serve them with efficiency.
- Common connections — If you have a common connection with a prospect, that can help you build trust with them faster. Additionally, the contact could help provide key insights into the prospect’s pain points and how you could provide value to them.
- Content shared on social media — If your prospect has a public Twitter or Facebook profile, checking out what content they have recently shared or engaged with can give you an idea as to what is currently important to them.
- Their company’s website, press, and social media pages — This will tell you whether their company has undergone any recent leadership changes, is currently releasing a new product, or has been in the news.
- Their contact listing in your CRM — Before hopping on the phone with your prospect, check out their profile in your CRM. This will tell you if and when any of your colleagues have engaged with them, and what content from your company they have opened or engaged with.
Additionally, performing a simple Google search for their company’s competitors will give you a great deal of information about their industry landscape.
2. Don’t jump into your sales pitch too early.
Resist the temptation to dive into your sales pitch as soon as you get your prospect on the line. Though you might have learned a great deal about their perspective during your research, nothing beats hearing directly from your prospect themselves.
Before convincing them to make the sale with a generic pitch, give them space to explain their current situation and what they are looking for. In addition to helping you build trust with the prospect, not jumping immediately into your pitch can give you more insight into how you can best provide value to them and can help you position your product better for the sale.
3. Communicate how your product provides value to the customer.
If your prospect didn’t have a problem they were trying to solve or a need to fulfill, they wouldn’t be in the market for a new product. It sounds obvious but in order to help the customer understand why your product is the solution to their problem you have to understand and be able to clearly articulate why your product is the solution to their problem.
As you look to sell, make sure the benefits of your product are easy-to-understand and relevant to your prospect. For example:
- Is your product designed to reduce cycle time and improve productivity for those who use it?
- Does your company offer free training that will help customers quickly get up to speed after they have made their purchase?
- Does the purchase of your product include free automatic updates for customers to make their jobs easier?
Whatever those unique differentiators are for your offering, make sure they are aligned with the needs of the customer and use these points to guide your sales conversations.
4. Focus on teaching instead of selling.
One of the most effective ways to provide value to your prospects and customers is to help educate them on a topic of interest. When you take an education-first approach, you become their go-to resource for information which helps you build trust.
Once trust is established and the prospect is ready to buy, your offering is far more appealing because you have already demonstrated value instead of pushing the sale without any proof of value for the buyer.
For example, if you work in software sales, instead of running through a recycled sales pitch with a prospect you can first contact them asking what their top three challenges are. Then during your meeting instead of talking at them with slides, you can walk them through possible solutions they could take to solve their challenges in an informative, engaging way.
5. Guide the prospect through the buying process.
When taking a value-based approach, your role as a sales professional is to act as a consultant helping your prospect make the most informed purchasing decision. Share fresh ideas and strategies that can help your prospect improve their own competitive positioning avoiding the temptation to tell the prospect what to do.
For example, if your prospect asks if they should take an action that you would typically not recommend, share a real-life example of how taking said action resulted in a setback for another buyer. This helps your prospect maintain their position in the driver’s seat for their buying decision and helps you convey your message in an honest, helpful manner.
6. Keep a personable approach.
As you embark on value-based selling make sure you keep a conversational, personable tone when engaging with your prospects. This shows you have a genuine interest in them and are not merely talking at them to make the sale. Here are a few tips to help you keep things conversational:
- Ask open-ended questions — All of the questions you ask your prospect should be for the sake of genuinely getting to know them, and they should all require answers that require some explanation. Aim to not ask questions that can be answered with a simple "yes" or "no."
- Master the art of small talk — While small talk may be the bane of every introvert’s existence, there’s no denying it can be a powerful tool for building trust with your prospect. When in doubt, asking about their professional interests and responsibilities or upcoming events they are planning or attending can be effective go-to topics.
- Speak as if you’re talking to a friend — Ultimately, you want the prospect to feel like they are receiving advice from a trusted advisor. Deliver your content the way you would deliver it to a friend to keep it personable and relatable.
If you’re looking for some helpful conversation starters, this post is full of great tips and examples.
7. Add value during every interaction.
Last but certainly not least, make sure you add value each time you engage with your prospect to continue building trust and creating a long-term positive experience. You want them to feel heard and supported each time they interact with you.
This could look like making sure you leave plenty of time to answer their questions in each meeting, not interrupting them when speaking, or even sharing helpful articles or content that is relevant to their business even when you aren’t actively engaged in a sales conversation. The small steps you take to make your prospect’s job easier can pay dividends in the long run.
A Value-Based Selling Framework
1. Value-Based Selling Focused on Qualitative Value
Your value selling framework doesn't have to rely on hard numbers. In many cases, speaking to the more abstract, qualitative benefits your product or service can offer is in your best interest. Delivering on this tactic leans heavily on your understanding of your prospect's day-to-day pain points.
How can you make life easier for your buyer and their employees? What can you do to iron out hitches, hiccups, and inefficiencies they face consistently? And what will the benefits that come with that "ironing out" look like?
If you can demonstrate what they stand to gain from your offering from an ease of use or personal success perspective, you can frame an intriguing value proposition your prospect will be receptive to.
2. Value-Based Selling Based Focused on Financial Incentives
This isn't exactly radical or shocking to point out, but businesses generally exist to make money. Financial success is one of the more obvious ways to gauge the value of a product or service — so being able to point to how your offering can help in that realm provides a solid basis for effective value selling.
If you can give hard figures or reference points for how much revenue your prospect can expect to generate with your offering or how it can reign in operating costs, you can frame a compelling, more concrete value proposition for them.
You can get there by providing case studies of similar businesses you've helped in the past or citing certain processes and practices they implement that you can make more efficient. One way or another, show that your offering can have a direct bearing on their financial wellbeing.
3. Value-Based Selling Focused on Differentiation
Successful companies generally don't blend in with the pack. They're distinct from their competition in some way, shape, or form. That's why pushing a differentiation-oriented angle while value selling is one of the more effective roads you can take.
What can your offering do to enhance the most compelling, unique aspects of your prospect's brand identity? If you can show that your product or service aligns well with who your buyer wants to be within their competitive landscape, you'll set yourself up for a successful value selling effort.
4. Value-Based Selling Focused on Security or Risk Aversion
Anxiety is a powerful motivator, and almost every business has its fair share of risks that keep its leadership up at night. Those could be anything from direct security threats to emerging industry trends they might be struggling to keep pace with.
If you can identify any specific fears or stressful vulnerabilities your prospect is dealing with you'll find a solid in for effective value selling. As you can probably assume, business leaders generally prefer operating as smoothly and securely as possible — if your offering can get them there, don't hesitate to sell on that basis.
Value-Based Selling Examples
For the sake of these examples, let's imagine a SaaS company that sells a construction management platform. A rep from that business is selling to a local fast-food chain, looking to expand its operations into a new region. Here's a look at how they might approach each type of value selling.
1.Qualitative Value-Based Selling Example
In this scenario, the rep has been working with leadership at the chain for around a month. In one of their conversations, the CEO mentioned being frustrated with lapses in communication with construction managers.
Let's say the rep's platform offers executives comprehensive visibility into their construction managers' project management. If they wanted to sell based on qualitative value, they might speak to how owners who leverage the platform deal with fewer headaches from miscommunication with their construction teams.
2. Financial Value-Based Selling Example
If the rep wanted to value sell based on financial incentives, they might try to cite case studies of other regional restaurant chains that saw boosts in revenue or considerable savings as a result of leveraging the platform. They would likely reference the hard numbers behind those improvements and demonstrate how their prospect's business could fit a similar mold.
3. Differentiation Value-Based Selling Example
Here, the rep might try to value sell based on differentiation by speaking to how the prospect's direct competitors that aren't leveraging construction management platforms are consistently running into delays and conducting inefficient builds.
The rep would let the prospect know that their company's software could give the chain some extra oomph to expand more effectively — relative to its industry peers.
4. Security Value-Based Selling Example
In this case, the rep would likely discuss the various threats and hitches businesses like theirs deal with when it comes to rapidly expanding into new territories — including construction delays, surprise costs, and potential disputes with contractors and builders.
See success with value-based selling.
Value selling is one of the more customer-centric approaches reps can take when engaging with prospects. It's a philosophy purely rooted in "solving for the customer."
If you want to leverage the method successfully, be sure to lead with empathy, consider your prospect's needs holistically, listen actively, and take on an advisory role in the process. If you can nail those key elements, you'll see the results you want from your value selling efforts.
Editor's note: This post was originally published on November 12, 2019 and has been updated for comprehensiveness.