Most sales people know that it’s really value, not costs, that drives sales; but many don’t know how to effectively present the value case. A Vistage speaker, Kevin McArdle, observed that the #1 reason that sales people don’t hit quota is their inability to articulate value in a way that resonates with customers.
He offers a valuable framework to help sales people overcome this limitation, and it’s something we can all learn from.
- Understand what the value really is. Using the formula “Value = Benefit – Cost†makes it clear if the real or imagined cost of switching to your product/service is high, it may reduce the benefit enough to negate the initially expected value. One of my Trusted Advisor members gave an example of this when talking about a company which sold sunk-pumps. A new competitor entered the market, and priced theirs $5K less than his client’s pump. The sales force began lobbying to reduce the price to stay competitive. Management decided to look into the situation and discovered, that the supposed benefit of the $5000 initial saving was lost when you took into account the increased frequency and financial and operational costs of maintaining their unit. Indeed, the data actually showed that their company’s was underpriced based on the 10 year total value of the pump – which led them to reposition their product and actually raise the price! So you need to visually show the superiority not just of benefits but also reduce costs long-term durability due to superior design, shortened repair times, etc.
- Quantify those costs. A client looking into using temporary staff, asked the vendor why her value was higher. Noting that an average of 70% of people hired in temporary positions leave before the job is completed – causing all kinds of disruptions, she focused on her company’s superior training and incentive programs designed to encourage temporary workers to finish jobs.
- State the timeframe. Benchmarks provide confidence. If you can show when the value will be created, that gives the buyer confidence as to when value will accrue.
- Provide relevant proof. Too often sales people’s key proof point is that the company has been in business several (e.g., 10 years). While that attests to the company’s ability to stay in business, it does not speak to the client’s question: is the sales person’s product really more valuable today than the competitor’s product. True influence from using case studies of similar companies who used similar products from your company recently with positive results and are willing to provide testimonials and references. Proof is persuasive when it’s on-target.
Are your sales people using the full power of value-selling to close deals? What works best for them? What would help even more? Share with us… and let’s all service more happy and profitable customers! injectable steroids online