Selling Value (Instead of Price) Requires a Value Proposition
Posted on March 3, 2015
Today’s sales and marketing professionals are under increasing pressure find, engage, and close more prospects than ever. While the amount of digital information available to B2B buyers has increased, their attention span for truly reading it has decreased. This means that more brand/product information is being processed in a smaller amount of time — so buyers are skimming content and relying upon short-cut sources (peers, customer, influencers) for advice. The result for sales and marketing professionals is that their first contact with buyers must communicate value, or they risk being lost in the background noise.
Whose Definition of Value Really Matters?
Talk to most sales and marketing professionals and they will share their frustration with what they perceive as buyers only interested in “price” during the sales cycle. Talk to buyers or read reports from Forrester and Gartner, and you’ll hear buyers share equal frustration with sales and marketing professionals that only talk about their products/services. It’s important to remember that in the absence of a meaningful point of product/service differentiation — buyers will revert to price as a primary purchase criteria. This (in turn) fuels that age-old friction between corporate executives admonishing their sales organizations to “sell of value, instead of price” yet the sales organizations lack differentiated “value” in their sales bag to sell.
The primary cause of the buyer/seller disconnect lies in the lack of commitment by most brands to truly understand what buyers find valuable, as opposed to what brands define as value. Point-in-time customer surveys aren’t enough — you need an ongoing dialog with your best customers and optimal buyers. The great thing is that most of them will be happy to share their insight because rarely are they asked.
I believe one of the biggest missing elements of effective buyer personas is what the buyer finds valuable. Sure, “purchase criteria” is often identified in the buyer journey, but additional vetting is needed to uncover the value dimensions by which strategic relationships can be formed. With this customer-centric understanding of value, sales and marketing organizations can dispense with the background noise messages of “industry leading” and “best-in-class” because that is seldom what buyers want. Companies are in business to make money, so B2B buyers expect vendors to demonstrate how they can help them do it. Instead of focusing on your product/service (means), you need to shift your narrative to focusing on driving measurable business outcomes (ends) that your competitors cannot.
Value Proposition Dimensions
If your company lacks an ability to quantify its value proposition then it’s time to address this problem head-on if you expect to achieve your revenue growth goals. Here are five ways you can help your customers make more money:
(1) Increase revenue – does your product or service provide a competitive advantage, access to new customers, or up-sell/cross-sell opportunity that generates incremental revenue?
(2) Reduce costs – can you deliver your product or service cheaper than your competitors?
(3) Mitigate risk – do you deliver your product or service in a unique way as to improve regulatory compliance, reduce financial exposure (e.g. inventory, warranty), or remove uncertainty (COGs, product returns, etc.)?
(4) Reduce transaction friction – do you deliver your product or service in a unique way that makes it easier to do business with your company versus your competitors? Examples might include self-serve portals, automated processes, transaction alerts, and other benefits that reduce the amount of time/effort/cost your customers spend managing you.
(5) Customer experience – do you help your customers improve the experience they deliver to their customers? If we consider the sequence of customer touch points (sales process, new customer on-boarding, customer education, customer service, off-boarding), are you helping your customers win at each stage (e.g. CLTV, reduced churn)?
Most sales and marketing professionals will agree that if they can shift the sales/customer conversations from cost savings to revenue generation, they can preserve margins. However, claiming revenue generation is easy — can you financially prove it? Beyond the first two dimensions, there are other ways to demonstrate (and quantify) unique value — are you leveraging them?
Wide Open Playing Field
Yogi Berra once said “…it ain’t braggin’ if you can do it.” If your company has a financially quantifiable value proposition that is relevant to buyers — you are ahead of the game. If this is not your company — it’s time to play catch up.
Brands that “get it right” first will enjoy shortened sales cycles, improved profit margins, and the ability to finally do what the CEO and CFO want: sell on value.