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The Inflexion-Point Blog: VALUE SELLING STRATEGIES

Avoiding the Value-Added Trap

Posted by Bob Apollo on Tue 5-Nov-2019

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TSW Magazine Nov 19 CoverAn earlier version of this article was first published in the November 2019 edition of Top Sales Magazine.

Every sales organisation likes to believe that what they are selling is valuable. But there are many interpretations and definitions of what value really means. In practice, of course, the customer’s opinion is the only one that really matters.

One of the most common claims made by salespeople, the sales organisations they work for and the marketing departments responsible for positioning their company is that they offer “value-added” solutions, or that they have a “unique value proposition”.

Companies can sometimes get away with these claims in B2C or simple B2B environments.

But in complex B2B sales environments, this “value-added” language often turns out to be a smokescreen for trying to persuade customers that they require more functionality than they really need and as a justification for paying more for the proposed “solution” as a result...

Unique Value Propositions cannot be generalised

And as for the thought that any organisation selling into complex buying environments can have a generic unique value proposition that will resonate universally with their entire target audience, well I believe that the very idea is an oxymoron. The terms generic and unique make for very uncomfortable bedfellows.

Customers are, of course, wise to this. When they hear the term “value-added solution”, many of them conclude from bitter experience that what the salesperson is actually offering is a cost-added solution, and that they about to be asked to pay for capabilities that they don’t actually need.

And if they sense that they are being presented with exactly the same so-called unique value proposition as every other customer, they are likely to feel (usually accurately) that the salesperson simply hasn’t taken the trouble to understood enough about their own specific circumstances.

Value must be customer-specific

There’s an important lesson to be drawn from this. In complex buying environments, value can never be generic. It does not lie in standardised solutions we offer our customer base, but in the specific outcomes that we help each customer to achieve.

Our claims of value always have to be specifically relevant to the customer’s circumstances, and often also down to the departmental, functional and key stakeholder level. Our salespeople need to be able to articulate and prove what our solution offers to each key party.

We’re not going to achieve this by claiming to “add value” to our products, services or solutions. The only way in which we’re going to be able to create, communicate and confirm our true value is by relating it to the customer’s specific circumstances.

Discover before you pitch

And that, of course, requires that our salespeople deeply understand both their prospective customer’s current situation and their desired future destination, and that they successfully resist the “itch to pitch” until they have done so.

They need to start by identifying, understanding and confirming the key business issues and challenges that are facing their prospective customer. Simply asking the prospect about their “needs” isn’t enough. We have to give our salespeople the confidence - leveraging our organisation’s collective experience of similar customer situations - to introduce previously unconsidered issues that are likely to turn out to be significant.

Then they need to assess and illuminate the impact of these acknowledged issues. Whenever there is only a small value gap between their current situation and their desired future destination, their prospect is likely to decide that they can afford to stick with the status quo.

Downsides as well as upsides

When focusing on impact, there’s a tendency in many tech-based sales organisations to pay much more attention to the upsides (the benefits of change) than to the downsides (the costs and consequences of inaction) and this almost always turns out to be a mistake.

This is because - as many studies have shown - the motivation for individuals and organisations to commit to change to avoid a risk of loss is 2-3 times stronger than the motivation to change in the hope of a future gain. In other words, the negative value of sticking with the status quo is often a more powerful influence than the potential positive value of buying your solution - and the absolute size of the customer’s perceived value gap is critical to their decision to act.

Different before better

And then when it comes to articulating the specific value of choosing your solution, your salespeople need, first and foremost, to be able to explain how and why your approach is distinctively different (and therefore a better response to the customer’s particular needs) than the customer’s other potential options. Your claims of solution superiority are always more powerful when they are based on a foundation of clear and relevant differentiation.

All these efforts will come to naught if the customer has any remaining reservations about why they need to change, how to avoid the risks of change, and why your approach is the one most likely to give them the outcomes they are looking for. Establishing what Gartner call “customer decision confidence” is absolutely critical in getting your value story (and your proposal) over the finish line.

Stop adding value, start creating value

I hope that these thoughts will serve to convince you that the phrase “value-added” should play no meaningful role in either your marketing messages or your sales conversations, and that the very idea of a generic unique value proposition is lazy and meaningless thinking in complex buying environments.

But I also hope that you can also see how giving your salespeople the confidence, tools and techniques to systematically create, confirm and communicate your unique business value in complex sales situations will inevitably have a positive impact on win rates, sales cycles and on your overall revenue reliability.

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ABOUT THE AUTHOR

bob_apollo-online-1Bob Apollo is a Fellow of the Association of Professional Sales, a member of the Sales Enablement Society, a founding contributor to the International Journal of Sales Transformation, a member of the Sales Experts Channel and the driving force behind Inflexion-Point Strategy Partners, the leading UK-based B2B value-selling experts.

Following a successful corporate career spanning start-ups, scale-ups and market leaders, Bob now works as a strategic advisor, mentor, trainer and coach to ambitious B2B sales organisations - equipping them to create, confirm and communicate their unique business value in complex sales situations.

Topics: Unique Value Position, Value Selling System