As 2017 came to an end, there were a few key purchasing decisions I was considering. The time had come for our firm to upgrade our infrastructure and technology platforms. Going through the buying process we created a complete list of requirements, vetted a number of suppliers against the requirements, eliminated options and came up with a short list. Finally, after proposals, negotiations and many meetings, we made and executed our decision. I made a few sales reps extremely happy!
We did not select the least expensive solution. Practicing what we preach, we selected the solution that offered the greatest value to what was most important to us. We were convinced that doing business with this particular vendor, and upgrading and transitioning to their platform, yielded the least amount of risk and disruption to our business operation. We were convinced and confident this purchasing decision was worth the risk of change and, ultimately, worth the investment we would make.
Case in point - value is not only measured in dollars and cents. In fact, the highest value is not typically the lowest cost. The value to a buyer can be worth the money, worth the time or worth the risk. The key component is, the value is determined by the customer, not by the salesperson.
At the end of the day, any sales representative wants to hear the prospect say, “Yes, I am buying from you!” To get to that point, somewhere in the conversation, we also need to hear them say, “Yes, your solution is worth it!”
The ValueSelling Framework® is based on a number of sound, fundamental principles. One principle is “People make emotional decisions for logical reasons.” This principle is directly related to the value conversation in that value must accrue to both the business and the individuals involved in the decision. When selling value, here are five best practices to keep in mind.
- Fight for capital. Clients must determine if your solution is a good use of their capital. Many sales cycles end in no decision; not because the value of the solution exceeds the cost, but because other solutions solving other problems represent a greater return on investment. As a sales rep, you must facilitate expanding the perceived value of your solution to the buyer. You must demonstrate yours is the best solution, and that you will add enough value to the business to justify this investment over a completely different investment. The buying decision isn’t always “Do I do business with you or a head-to-head competitor?” The buying decision is sometimes “Do I fund this project or that project?”
- Business Metrics. Business value is measured in business terminology. Cost savings, efficiencies, and revenue growth are areas where you can measure the financial impact of your solutions. Many sales reps fail to partner with the prospect to understand the business value because they are focused solely on the technical need and not the business need and impact.
- Ownership. Sales reps that tell a client the value of their solution often find themselves in trouble. Your prospect must be able to define and demonstrate the value, or you run the risk that they won’t believe your data. Value propositions are promises of potential value delivered to a broad audience. ValueSelling requires the sales rep to guide the conversation and engage the prospect to conclude the probable and potential value on their own. People rarely argue with their own data. Prospects must own the value to have the conviction that it is realistic and achievable.
- Absolute Value. Percentages without context are meaningless. A 20% savings to one prospect may be sufficient to justify a purchase. However, that same 20% for another prospect may be completely inadequate. Help your prospect do the math – 20% of what? Is that enough to justify the investment, change, risk, and time?
- Value Expansion. There is usually more than one way to justify a purchase. Be purposeful in expanding the metrics to build a business case with multiple facets of value. One of our clients was able to build a value proposition around cost savings. The sales reps were very effective at quantifying the amount of money that a prospect would save with their solution. With the help of the ValueSelling Framework, they expanded the value equation by also quantifying the cost of quality and customer experience. With that expansion, a good deal became a great deal, and the business case to purchase was solidified.
It is critical to understand and execute these five value-based best practices as they apply to the business value and the personal value to each individual involved in the buying decision. Position yourself and the conversation with a strong enough value proposition to win in the fight for capital, so that your prospect realizes the price is worth the investment, the risk is worth the reward and the effort is worth the impact. This way, even when your solution is being compared to a completely unrelated purchase decision, there is enough value to successful close the deal. Be the clear winner. Be worth It!