It all starts with why. Simon Sinek so profoundly pointed out one of the most simple principles in modern marketing, in his book and many TED talks, “Start with Why.” Brands and leaders that tell a story that expresses their unique purpose in the world first, win more hearts. People are emotional creatures and make decisions based on those emotions. And if they can’t justify the value of something emotionally, they’ll be hard pressed to say yes. We’ll dig into one of the most popular sales leadership trends, value-based selling and walk you through how to train your team how to do it well.
Value-based selling is taking over the sales industry. ZenDesk has referred to it as “the sales methodology of the future.” We identified it as one of the top sales leadership trends to watch in 2024. And a study by ValueSelling Associates determined that 87% of high-growth organizations have adopted value-based sales.
And it’s for good reason. According to Gartner, sales teams on average double their win rates when they embrace the principles of value selling. Put simply value-based selling works, and every sales leader should be looking into how they can incorporate value-based selling into their sales strategy.
In this article, we’ll take a look at what value selling is and consider a few ways to train and equip your sales team to take advantage of it.
Understanding value-based selling
Value-based selling relies on a simple and proven truth: people don’t generally buy things for the sake of the thing itself—they buy it for what they can get out of it, i.e., the value that the thing provides.
This is true for nearly any kind of purchase, no matter how big or small. When you buy a slice of pizza, you aren’t really buying a slice of pizza; you’re buying the taste and smell, the nostalgia and memories it conjures up, and of course the feeling of being full. When you buy a car, you aren’t really buying a car; you’re buying the status, the excitement, the utility, the freedom. And when businesses purchase a software suite, they aren’t really buying the software; they’re buying the saved time, the increased efficiency, the overall ROI, the workplace prestige from championing a successful choice.
Value selling taps into this aspect of human psychology to pitch your products or services based on the value they provide. It seeks to identify the key value propositions for your offerings, match those value propositions with a given buyer, and explain to that buyer what they’ll be missing if they don’t make the purchase.
Equipping your team to use value-based selling
For your team to use value-based selling effectively, they’ll need to understand commodity vs. value, know what value propositions your offering provides, be able to ask the right questions, and have practice guiding a customer to value in real time. Let’s walk through each of these elements.
Emphasize the differences between commodity and value
The most important thing your sales reps need to understand for value selling is the difference between commodity and value, and how to distinguish them.
- The commodity is the product or service itself. It’s what the customer is technically buying on paper.
- The value is the reason they’re buying the commodity. It’s the benefit they receive from having and using your product or service.
Here are a few examples to illustrate the difference:
- When selling medical equipment, the focus shouldn’t be on the specs of the technology (the commodity), but on the value it provides: increased accuracy for diagnosing patients, improved efficiency due to less retesting, saved lives, decreased chances of a malpractice suit, boosted reputation for the facility.
- When selling consulting services, the commodity includes your analysis, strategy, and implementation guidance. And while you’ll obviously need to outline what those elements will look like, the focus should be on the value they provide: improved market penetration, increased customer loyalty, increased revenue.
- When selling educational technology, don’t focus on the software platform itself (the commodity), but on the platform’s value: increasing student engagement, enhancing their ability to retain information, catering to different learning styles, raising the institution’s grade point average, attracting more funding.
Provide your team with clear value propositions
Once your sales reps understand how to distinguish the nuance of commodity and value for your product, you’ll want to develop specific value propositions.
Although value-based selling works best when sales reps can think on their feet, you don’t want them relying solely on the value they can think of in the moment. That would risk having reps freeze up, grasp at straws for values that aren’t as relevant, and possibly even give customers unreasonable expectations.
Instead, equip your reps with a thorough knowledge of the canonical values your product or service offers. Make a list of value propositions that they can memorize and have ready to go. Then your reps can cater those values to a given customer.
Your value propositions should be as detailed and as tangible as possible. For example, if your service increases revenue for customers, tell them by how much. Include specific examples from case studies and/or averaged figures from your customer base to give them an idea of exactly what they can expect to save if they sign on with you. If possible, you can even create a formula for reps to use, where they plug in a customer’s needs and details to see an even closer estimate of their expected savings.
The list of value propositions should include all the major values your product or service provides, matched with the pain points each value proposition solves, and preferably structured in a way to show which values are most helpful to emphasize. And be sure to revisit this list from time to time, iterating and improving it based on how well customers have responded to each point.
Encourage reps to ask questions
Value selling is both a science and an artform. Your value propositions should be based on clear and objective ways that your offering will improve a customer’s experience, but it also matters how you present those values.
You don’t want to simply info-dump values to a customer right out of the gate. Instead, you should start by getting to know the customer, taking time to understand their specific needs and pain points, and ideally guiding them to pinpoint the values they need that your product or service will provide.
And you do this by asking questions. For example:
- What are your long-term and short-term goals?
- What are the biggest challenges you’re currently facing?
- Are there any processes for which you need to improve efficiency?
- Can you provide specific examples?
- How are these challenges influencing your finances?
- How are they affecting your team’s morale?
- What solutions have you tried so far, and how have they worked?
- What is your timeline for resolving these issues?
- In what order would you prioritize your needs?
Each question a rep asks should lead as naturally as possible into the next based on the responses a customer gives, seamlessly guiding the conversation toward what the customer really needs. From there, your reps will be in a perfect position to explain how your offering provides exactly the value the customer is looking for.
Role play value selling with sales reps
Knowing your value propositions and what questions to ask is one thing. Actually guiding a customer through them is something else. And that’s why practicing this value selling process is essential.
Set up role-play scenarios with fictional customers to have your reps sell to. This will work best if you flesh out a full backstory for each mock customer, including all the specific goals, needs, pain points, and priorities a customer might have. Then you can evaluate how well a rep navigates the mock sales call, and focus on improving the elements that need more work.
Traditionally, this role-playing has been a one-on-one process with a sales coach, and that personal element is still important to include. However, these days you can also supplement the one-on-one role playing with AI tools that play the role of a mock customer. These tools allow reps to do more training in less time, and they can often overcome the shortcomings of a human mock prospect.
Additionally, AI-based conversational intelligence tools have become crucial for identifying where there’s room for improvement. They can transcribe and analyze sales calls, keeping a record of each rep’s conversations with customers. Not only does this give you an at-a-glance view of how they’re doing, but some tools can even automatically highlight what reps need to continue working on.
Stay ahead of the latest sales leadership trends
Value-based selling is one of the top trends you should be paying attention to right now, which we highlighted in our free ebook, Sales Leadership Trends 2024: Navigate the New Normal. But it stands among several other key developments.
The sales landscape has gone through dramatic changes over the past few years, from remote selling to the rise of generative AI and much more. Things are finally beginning to settle into a new normal, but it’s vital for sales leaders to understand how today’s sales environment will be different than before.
We identified five key trends that are defining 2024’s new normal—along with ways to handle them. To read about them all, download our free ebook.
And to learn what Performio can do for your organization, request a demo today.