Earlier this year, Mark Mitchell, who co-authored our book RAINMAKER, and I conducted a study to learn what Building Materials Sales Forces are being challenged with this year. 146 organizations participated. For the next few blogs, I will provide insight on what we learned. I will share what you said were the top 5 challenges you face, with a brief commentary on each.
Challenge #1 – Selling Value vs Price
The #1 challenge has been expressed many times before. 61% of the participants rated this as the #1 challenge. We all know that customers are savvy in knowing what competitors offer and in extracting price concessions from suppliers.
If your product or service has become commoditized, then it is natural for a customer to seek the best price if there are few points of differentiation.
What I have observed is this:
- Most salespeople are just not comfortable describing VALUE
- Most salespeople struggle articulating what value is and establishing a compelling business case on why a company should do business with them.
- Most do not prepare diligently to engage in meaningful dialog on what value means to the customer
When all is said and done, value is in the eye of the beholder, and value may change frequently depending on the type of selling situation you are in. And if we are not clear about the value we bring, business transactions relegate themselves to price.
We believe that there are five components of Value:
- Performance – How your products, company, or service meets their “performance” requirements.
- Financial – How your products, company, or service generates ROI, is cost-effective, saves or generates money, and/or provides a reasonable total cost of ownership.
- Service – How you or your company provides consistent support, how responsive you are, the ease of use of the product, and your flawless implementation.
- Image – How your products, company, or service enhances their company’s image.
- Relationship – How you and your company develop trust and dependability, how you go the extra mile, your level of experience, and your knowledge of their business.
If you are a leader reading this, I strongly encourage you to lead a discussion with your reps on each of these five value buckets. You will be surprised at what you will learn and it will help you focus on how they should SELL VALUE instead of price.
If you are a salesperson, prepare a set of questions for each of these value buckets to engage your customer in how they perceive value. It could be a real difference maker.
THINK ABOUT IT.