What Is Value Selling? (With Principles and Benefits)
Updated December 10, 2022
Companies may often commit much of their resources toward generating sales to ensure maximum profit. Value-based selling is a strategy salespeople can use to convince customers to buy from them. Understanding this strategy can help you increase a company's market share and profitability. In this article, we define value selling, explain its benefits, discuss its principles, and share tips for implementing this sales technique.
What is value selling?
Value selling is a sales technique focusing on the benefits a customer can get from using a product or service. When selling value, the seller de-emphasizes the price and focuses on the actual worth or value of the product. This sales strategy aims to demonstrate how the product can improve the customer's revenue or life, which can help the customer justify purchasing the product. Although selling value is typical of business-to-business transactions, it can also apply to business-to-customer transactions.
Benefits of value-based selling
The following are some benefits of value selling:
Provides long-term relationships with customers
Selling a product or service based on its value rather than just price can help you show customers that a company cares about their journeys and perspectives. This show of concern can help a company develop a closer and longer-lasting relationship with its customers. Close relationships can encourage brand loyalty and patronage.
Increases understanding of the product or service, target customers, and industries
Effective value-based selling typically depends on an in-depth understanding of the product, customer, and industry. A salesperson can get this understanding by conducting relevant and focused research. This research can help you learn about different industries and how to relate to customers. It may also help you learn more about the usefulness of the company's product rather than just its features.
While negotiation is an important part of a sales transaction, it can sometimes be time-consuming. A customer may be less likely to try to negotiate the price if a salesperson is clear about the benefits a product or service can provide. Doing this can help save time and allow the customer to purchase more thoughtfully.
When you focus on a product's value rather than its price, you can convince customers that they're getting commensurate value for their money. Customers may better understand the price a company is charging if they know the measurable benefits they're getting from a product. As a result, a company may be able to sell the product at its maximum price point, which can improve profit margins.
Principles of value-based selling
You can demonstrate value to prospective buyers by incorporating the following principles into your sales process:
Value-based selling involves thoroughly understanding and prioritizing your prospect's problems, desires, and needs. The first step in this process is research, which can help you acquire all possible information about your prospects before a sales call. When dealing with individual prospects, consider learning about their current role and career history, social media activity, and the connections you may share with them. A look at the workplace's customer relationship management software for a customer's listing can also offer you additional insights.
If the customer is a corporate organization, consider looking through its website for insights into its vision, mission, and target market. The website can also help you appreciate the products the customer sells and their sales volume. A look at their competitors can also provide you with useful information.
Delay pitching your sale
Considering the knowledge you've gathered from researching your prospect, you may be eager to begin your sales pitch immediately after you get on a call with them. While this may sound or even feel reasonable, it may impact the effectiveness of your pitch. By delaying a little, you can give the prospect the chance to share the situation they're trying to fix and their desired results in their words. Whatever they share may reveal additional insights and help you package a better sales pitch. It can also help you earn the prospect's trust and increase your chances of making the sale.
Communicate product value
Your prospect may want a new product because they want new solutions to their problems. You can increase your chances of making a sale by helping them understand how a product or service solves their problem. This help involves communicating, in clear terms, the value that a product or service can bring to them. Value-based selling is about calling their attention to what they stand to gain from making the purchase.
Teach to sell
Another way to sell value to your client is to take the education approach, which involves sharing knowledge about topics of interest with your prospects and customers. For example, you can share possible solutions to the biggest challenges they're most likely facing. This approach can help demonstrate your expertise and earn your prospects' trust. Having developed trust in you, they're more likely to approach you when they're ready to make a purchase.
Provide guidance during the sale
Providing value during the selling process also includes helping the prospect make informed purchasing decisions. The goal is to ensure they get the most favourable outcomes from making the purchase. Share helpful insights and opportunities for choosing the appropriate products for their competitive advantage while refraining from telling them what to do.
Value-based selling works best in a cordial environment. You can foster this type of environment by being personable, enticing your prospects, and engaging them. The ability to initiate and sustain friendly conversations can be helpful here. Also, asking the right open-ended and follow-up questions can help demonstrate genuine interest and move the conversation in the right direction.
Provide value at every opportunity
You can sell value better by being consistent with your value delivery. This consistency comes from making use of every opportunity to interact with the prospect to provide them with something valuable. Providing value can be as simple as giving support as necessary or providing tools, articles, podcasts, and other resources to help them achieve their goals.
Tips for practising value-based selling
Here are some tips to help you implement value-based selling:
A salesperson's first goal in value-based selling is to find out a potential customer's current challenges. To do this, you can use exploratory questions to encourage customers to discuss their struggles and what they want to achieve. While the customer responds, practise active listening to demonstrate respect for the customer's answers and opinions. Listening to and learning about the customer's perspective gives you a better understanding of how a customer might benefit from the product.
The customer might believe it's unnecessary to solve their problem or address the need the seller has identified, especially if they were unaware of the problem. As a value seller, you can convince customers of the urgency of solving their problem by emphasizing the overall benefits of the solution. You can also discuss how addressing the issue can help them reach certain personal goals faster.
Be patient with customers
Value sellers identify what might delay a customer's positive response in advance so that they can address them immediately. They show the customer that their product or service can positively affect them and improve their lives. Some customers may still be slow to respond as expected. In such situations, you can pursue other sales opportunities and check later to determine if the customer may be more responsive.
An important task of a value seller is letting the customer know that you sincerely care about the customer's success. Value sellers build rapport and establish a personal connection with the customer. They make it obvious that they're trying to help the customer solve a problem and make their life easier instead of just trying to earn a profit. Value sellers practise compassion, empathy, and friendliness. They're honest about their product and ensure it can help the customer.
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