A sales argument that is often overlooked alongside price and performance is the individual value or economic benefit of a product. Value selling is a sales philosophy that is based precisely on this. The principle is the basis for sustainable customer management, enables lucrative upselling and extends the customer life cycle. How is everything connected and how does CRM help you with value selling? Find out in this article.
Table of contents
What is value selling?
By definition, value selling is a sales philosophy based on a benefit and value-oriented argumentation. It is about recognizing and communicating the individual customer benefits of a product.
The term "value selling" originates from marketing and sales and is viewed differently by different experts. Here are a few examples:
"Value-based selling is a value-oriented sales philosophy in which [...] the benefits for a customer also positively influence the perceived value of the service and the achievable price." [1]
"The motto of value selling is that certain services are high-quality services with added value that are billed to the customer." [2]
"We define value selling as an improvement in sales processes and interaction with customers. It consistently combines your own offering with the customer's perspective and benefits." [3]
The examples of value selling definitions could be supplemented by a few more. They show that the concept of value selling or value-based selling is not clearly defined. However, the basic idea is always the same, as the following explanation shows.
This is how value selling works:
"Selling added value instead of products"
In a market with a large number of products that have very similar characteristics and qualities, a company needs other options in addition to price and performance to clearly differentiate its products from the competition. To do this, the sales department looks at a product from the customer's point of view and assesses from this perspective which specific additional benefits or services can increase the value of a product.
Ultimately, it is this specific value that makes a product more valuable for buyers. What is meant by this can be quickly demonstrated using a clearly exaggerated example. Let's take a simple pressure cooker - simple, but very illustrative. Anyone who cooks a lot will benefit accordingly. A family that mainly eats raw food, on the other hand, will derive less benefit from the product - even though its performance is theoretically the same. Value selling focuses precisely on these individual differences in value.
The different sales processes can also be better understood using this example.
A classic approach in sales is to list the product benefits.
The value selling example for the sales approach is therefore very different from the classic approach. The value-oriented approach does not focus on the product with its general characteristics, but shows the specific valuable benefits it brings. A successful summary of the value selling principle is therefore "selling added value instead of product characteristics (features)".
Value selling: advantages for sales
Why do companies use value selling? There are a number of good reasons for this. The decisive factor is certainly the economic aspect of wanting to achieve more lucrative sales. There is indeed great potential here. Some authors estimate that 80 percent of companies sell their services below value. This is often the result of not knowing the actual value that a product could bring to a customer. Value selling solves this dilemma by putting the sales team in the customer's shoes and thereby gaining insights into their own product and its value.Customers are prepared to pay a higher price for this added value. This is how the best price is found.
The actual goal of value selling is, of course, to optimize the sales process and make it successful. As described above, a central part of the sales strategy is to communicate added value. These must be anchored visibly and sustainably with prospects and customers along the entire customer journey so that the decision is ultimately made in favor of your own product. The following chapters explain all aspects that are important for successful value-based selling in detail.
Implementing value sales:
Preparing for negotiations is the be-all and end-all
Will the sale be made or not? This crucial question is ultimately clarified in negotiations with (potential) customers. Value selling offers sales staff a tried and tested concept for achieving good deals. As this is an individualized strategy, preparation is essential for success. The following diagram shows an example of possible preparation for value selling.
1. adopt the customer perspective
For value-based selling, it is important to understand the customer. Ask yourself these key questions:
- What situation is the customer in?
- Does he need a quick, permanent or long-term solution?
- Did the request arise from a strategic consideration or an acute need?
- How complex is the request - is it easy to fulfil or does it require specialization?
- Who will make the decisions?
2. analyze the competition
The next step is to analyze your own competition. As a rule, there is a very clear picture in sales, for example in terms of market prices, market position, etc. Against the background of the value selling strategy, it is important to work out the weaknesses and, above all, the strengths of your own product. In this context, identify all the solutions you can offer.
Objective: Determine the UVP (Unique Value Proposition)-the features that make your product unique and better than comparable solutions.
3. determine benefits and values = find the added value for customers
Benefits and values are now the result of the first two steps. Check how well the requirements from step 1 match the solutions from step 2. The better your offer matches the requirement, the greater the benefit and thus the value.
4. define goals
Even though the customer perspective is an important aspect of value selling, your own goals remain the measure of all things. Tip: When setting prices, don't just take current considerations into account, but also include cost changes. Also prepare for possible upsell scenarios, for example by offering intelligent services. When preparing for negotiations, also calculate a realistic lower price limit.
5. compile arguments
You have now gathered all the information you need to prepare for the individual negotiation. To do this, compile the arguments that have emerged from the four steps. It is advisable to weight these for a successful discussion.
Value selling with CRM: making sensible use of existing data
The previous section was about adopting the customer perspective and analyzing the customer situation. But how can this be done? The necessary data is often already available to you-in the CRM system. A data analysis brings this treasure to light. Do you already have a history with the customer? Then you can use this experience directly for your value selling preparation. But CRM data is also valuable for the initial contact. For example, you can identify industry-specific trends from the behavior of customers and interested parties. Key figures such as Customer Lifetime Value (CLV) are interesting for defining your own targets - here too there are close links to CRM. By documenting every negotiation in the CRM system, you will ultimately build up an ever more extensive treasure trove of data.
Summary: What does sales need for value-added selling?
Various prerequisites are necessary for successful value-added selling. In summary, the following factors are important:
- In-depth knowledge and understanding of the customer's needs
- Useful data, for example from the CRM
- Information about the competition
- Identification of the individual added value of your own product
- A clear target definition and a realistic lower price limit
- Formulation of the unique value proposition
- Consistent internal and external communication of the UVP
Outlook: Sustainable sales and value selling
The definition of sustainable sales is discussed as intensively as the definition of value selling. In general, economic, ecological and social factors all play a role. With regard to the value-oriented approach, sustainable sales should be understood primarily in economic terms, while the other aspects often play a role, particularly in the communication of benefits.
Sustainability in this sense refers to lasting customer loyalty, i.e. the longest possible customer life cycle. The resource invested is time and therefore money, namely for acquisition, initial contact and project management support. These factors make acquiring new customers more expensive than maintaining existing customers, so it makes economic sense to focus on long-term relationships.
Value selling is essential for this because it is designed for the long term and is not a one-off tactic. Repeatedly demonstrating value at various touch points not only ensures that your product is firmly anchored in people's minds but, in combination with positive reviews of your product, also ensures that new customers are found without cost-intensive advertising. Provided that your product delivers what you promise in terms of added value. This inspires customers and binds them to your brand. Positive reviews turn customers into free brand ambassadors.
What does sustainable customer management mean?
Sustainable customer management is made up of various measures. The following main topics can be defined:
- Contact points
- Personalization
- Proximity and availability
- Seamless experiences
The best practices for sustainable sales processes show the extent to which the measures can be filled with life.
Upselling as an opportunity in value selling
The aim of upselling is to sell products at a higher price - incidentally, these are usually also products with an extended scope of services. In order to realize an upsell, it is important to present the added value of the higher-priced variant - and this is the central point of contact between value selling and upselling. Communicating added value and additional benefits is the most important argument for sales to increase sales of a more powerful or more comprehensive product.
Upselling in particular reveals the potential of an existing customer. It is possible to increase sales without expensive and time-consuming new acquisition if the sales department is aware of the value of its own product for the customer.
Good to know: In addition, it is possible to build cross-selling on value selling, i.e. to boost the sale of additional products. In both cases, it is a clear advantage if sales and project management work together. A CRM with project management makes this possible.
Intelligent services create greater value
Intelligent services or smart services are another exciting tool for value selling. Depending on the product, highly specialized and personalized offers can be created. In the example of the pressure cooker, the possibilities are soon exhausted - a product demonstration would perhaps be conceivable. For complex products, however, much more extensive smart services are possible - and in various sectors. A typical example of a smart service is data-supported maintenance and repair work. However, such services are also widely used in the software sector, for example for onboarding or support. The charming advantage: Smart Service can be adapted very specifically to a customer's needs - and this creates a link to value selling. Here, smart services are often the strongest arguments for sustainable customer management and a long customer life cycle.
Best practices for sustainable sales process solutions
How can sustainable sales be realized? There are several ways to do this. Our best practices for sustainable sales solutions provide an insight into different areas that you can implement with a CRM solution such as Gedys CRM.
Contact points: The more contact options there are, the better - at least as long as the same service is offered via each channel. The CRM system makes it easy to simplify communication so that customers can make inquiries by phone, email or using a form and always receive the same high quality of response. Conversely, almost a third of private consumers are at risk of switching brands after a negative interaction-customer churn is also a problem in B2B. You can counter this with a CRM.
Personalization: Personalization is a decisive lever in value selling. CRM software enables companies to gain valuable data in order to better understand customers, their problems and their wishes. Based on this, you can offer customized solutions. The simple principle applies here: the value for customers is greatest when the offer fully covers their needs.
Proximity and availability: Communication is a focal point of customer relationship management. If possible, the provider should be quickly accessible, and not just in sales. In case of doubt, complaint management is an important building block for sustainable customer management. It is by no means the case that customers leave immediately if there are problems. Rather, it is relevant how the provider reacts to them. Complaint management is simplified with a CRM with a ticket system.
Seamless experiences: Seamless experiences are also an indispensable element for successful sustainable sales processes. Accessibility is important for this - in other words, not putting any hurdles in the customer's way, but offering consistent (smart) service. This means that every contact, whether from a landing page, via social media or from an event, must be responded to immediately and processed without breaks between the media and the software. To do this, you not only need capable sales staff, but also the appropriate interfaces and integrations.
Conclusion: Don't sell below value anymore!
Value selling is a marketing and sales term that encompasses many aspects. The central idea is to communicate not only price and performance to customers, but also the individual value of a product. This allows the best prices to be achieved, while at the same time value-oriented communication ensures satisfied and loyal customers. Sustainable customer management with value selling also makes it possible to extend the customer life cycle and achieve lucrative upselling deals.
[1] Value Based Selling II: Value Based Marketing Instruments / Marco Schmäh, Heinz Stark. - Reutlingen; European School of Business, Chair of Marketing and E-Commerce, 2006; 58 pp.
[2]https://www.springerprofessional.de/verkaufstechniken/kundenmanagement/was-ist-eigentlich-value-selling-/19896550
[3] https://www.marke41.de/content/value-selling---vorteile-für-kunden-erlebbar-machen
