6 Ways Value-Added Selling Increases Your Bottom Line
Value-based selling has been gaining popularity thanks to its many benefits and advantages, both financial and subjective, that impact every aspect of the business. With so many benefits to be gained, why haven’t all organizations adopted value-based selling yet? The answer is that it can take some time, costs, and buy-in to get your value-selling program off the ground. For example, adopting a value-selling framework can mean re-training sales staff and investing in new technology to facilitate the framework.To overcome these initial hurdles, it is important for business leaders to understand the return on their investment, or ROI. In fact, value-based selling, directly and indirectly, increases businesses’ bottom lines in two primary ways, by enabling them to:
Sell more profitably
Expand their revenue streams
Keep reading to learn how value-based selling has a positive impact on each of these success metrics.
Sell More Profitably
The first area where value-based selling makes an immediate impact on your bottom line is enabling you to sell more efficiently and profitably.
1. Reduce the need to discount your offerings
With value-based selling, your conversations with the customer are focused on your offering’s quantifiable value for their business, not the price. Value-based selling enables you to earn the trust of stakeholders within your target accounts so that they become internal champions for your solution within their organization. With this dynamic, businesses often find that lengthy price negotiations and steep discounts become a thing of the past. This is because when customers can clearly see how your solution will measurably impact their business and make their jobs easier, they are less likely to press for a bargain. And when you no longer need to rely on discounts to close a sale, your deals are more profitable.
2. Compete on value, not just on price
Value-based selling is also an effective approach for winning deals against competitors. In the past, going head to head against the competition was often a pricing battle. It’s a no-win situation: if you don’t discount your price to match the competitor, you risk losing the deal, but if you do discount your product, the deal may be unprofitable for you. With value-based selling, instead of competing on price, you compete on value. This enables you to hold your ground on price and rely on promised value to seal the deal. Of course, it is critical that this promised value comes to fruition once the solution is implemented. Learn what value realization isand how it helps you deliver and communicate real-world value post-sale.
3. Increase prices without losing sales
With value-based selling, not only can you reduce the need for discounts, but you may also be able to increase your prices without losing sales, improving your margins and further increasing your bottom line. Again, this is because customers are more likely to choose a solution that demonstrates clear, measurable value to them–even if it comes at a higher price point.
4. Improve sales efficiency
Few things are more costly than a low close rate. In many organizations, sales teams spend hours on calls with prospect stakeholders, only to have the lead go cold and lost to a competitor. With value-based selling, sales teams are using sales calls more effectively by focusing their time on what matters most to their prospects. They can easily answer the question: how specifically will this solution help this customer? This helps sales representatives more quickly close sales with new accounts–and more quickly disqualify leads that aren’t likely to close. For example, when prospects understand the solution and its value in the first call, they more easily recognize if a solution is not quite the right match–or maybe just not the right time. This reduces time wasted and allows sales teams to focus their time on the right prospects and deals. To learn more, see how to use value-based selling to overcome resistance and close more deals.
Value-based selling does not end with the sale. Once sales has closed the deal, they transition the new customer to your customer success team, whose responsibility it is to seamlessly continue the pre-sale value conversations and help customers realize the value of the implemented solution. In the ongoing value realization stage, customer success teams track the actual value customers experience—including key performance indicators (KPIs) like top-line revenue growth, time and cost savings, risk reduction, and more. In addition, measuring value realization enables customer success teams to refine the solution based on actual performance, ensuring better customer results and reducing churn rates. To learn more,see customer value best practices throughout the entire customer journey, from sales to customer success and beyond.
6. Upsell and cross-sell into existing accounts
Finally, with value-based selling, you’ve already created a relationship with your customers that is based on value. This makes it easy to seamlessly continue selling them on additional value opportunities throughout the business relationship. In addition, when your customer success teams are closely monitoring actual solution performance, they can more easily identify cross-sell and upsell opportunities within their accounts.
For more information on value-selling and value realization, or how this approach can work for your organization, we invite you to schedule a demo or contact our team of experts. We are here, ready to help.