By Michael Kleinman.
Selling has never been more difficult. The challenges of commoditisation, hyper-competition and procurement driven RFPs makes it harder for suppliers to differentiate themselves. Value Based Selling has been designed to address such challenges by helping suppliers shift the client’s agenda from price to value.
Value Based Selling can be positioned in at least two sectors of the normal selling cycle. Firstly, where the client has been approached before any formal document (e.g. RFP) has been released and secondly after a formal bidding process has begun. The reasons and metrics used to adopt Value Based Selling are both an increased win rate and more profitable engagements.
Value Based Selling focuses on articulating unique value
Generally Value Based Selling means that the supplier has understood the client’s formal and informal selection criteria and expressed the benefits of dealing with them in terms of business and personal benefits whose value is recognised by the client. Naturally, any value proposed to a client must be competitively unique to the supplier or at least perceived as such by the client. At the level of large or strategic opportunities, it is especially important to recognise that confidence in the supplier’s passion for delivery and personal benefits to the client may dominate the final selection process. It is often the case that the product or service to be delivered can be provided by more than one supplier, so the final selection is often a matter of criteria which are likely to reflect more personal or higher level concerns than the original evaluation criteria. A number of such deals in which I have participated were decided on Value elements, ranging from the perceived integrity of the selling team, the deep understanding of the client’s business and competitive marketplace displayed by the selling leads to the willingness of the supplier to accept an equity-based contract. It was always a matter of understanding what the client wanted most deeply. To foster such an understanding, strategic selling stresses the general importance of relationship and of developing inside support, or coaches, within the client organisation. This support is often vital to identifying and gaining access to the real decision makers within the client organisation.
The obstacles to Value Based Selling
Well, if Value Based Selling has so much promise, why don’t more companies do it? Firstly, many, many deals are perceived by both sides as commodity deals, where the possible differences between suppliers are slight differences in quality, price or speed or convenience of delivery. Even in complex deals, such as outsourcing, Value Based Selling is not used on the grounds that:
- Most salespeople are happy to work to the client’s ‘written’ agenda, which in their view is set by procurement and only involves client executives and business users tangentially;
- The presence of third party advisors / internal procurement usually means that access to those clients who can recognise value is cut off;
- The supplier organisation and its selling processes are not geared to Value Based Selling;
- Salespeople complain that the normal components of Value Based Selling (Portfolio, Account, Opportunity and Call Planning) take too much time – in fact they actually save time.
Becoming a Value Based Selling organisation
Overcoming these obstacles is not easy; based on many years of sales and sales coaching experience some of the adjustments required for adopting Value Based Selling are setting up, aligning research and marketing functions, training the sales force to deal with client executives and adopting a sales process which provides early contact with the client. However, the most important changes for most organisations are:
- Gaining senior executive commitment and alignment (sales, marketing and delivery);
- Implementing value-based sales training and using effective sales processes.