Why is Selling Value so Difficult?
Where does value come from?
The concepts of value proposition, value-based selling, value creation, and value communication are often discussed in the business world. Yet, despite the eloquence surrounding these terms, we are left pondering their practical application and true meaning.
One problem with understanding the word value is that it depends on personal perspective. Like beauty, value is up to the beholder and is individual. Nonetheless, value can be succinctly encapsulated by the formula: Value = Benefits – Costs.
Let’s delve into Costs first. Costs represent what the customer sacrifices to acquire your solution. This includes not only the monetary price of the product or service but also encompasses lifecycle costs, the risks associated with change, the time invested in learning new methods, personal stakes, and potential challenges during implementation.
In sales work, we should demonstrate the value of our own solution to the customer in a way that the customer and the salesperson see the matter in the same way. I mean, really in the same way. Again, this is not easy.
What are the core challenges?
For the past 20 years, I have consulted and trained B2B sales and sales leadership in more than 40 countries. It seems that there are three core challenges:
Challenge 1:
The value propositions of many companies are far too vague in the eyes of customers. ’Everything under one roof’, ’The best partner’, ’The most sustainable company in the field’,
’The best life cycle value’ are nice words on the company’s strategy sheets.
However, when we help sales teams win sales opportunities, we often notice that the sales team is unable to describe the value produced for the customer at a sufficiently concrete level. Often, companies have not sufficiently digested these rather high-level value propositions from the perspective of the customer and the competitive situation.
Challenge 2:
While most sales professionals recognize the importance of prioritizing the customer’s needs over their solutions, translating this understanding into practice proves challenging for many sales teams.
Despite believing they are customer-focused, objective analyses of sales interactions often reveal a different reality. This discrepancy highlights a common shortfall: sales teams fail to delve deeply into the intricate details of the customer’s processes, their associated costs, and the underlying needs. As a result, they struggle to effectively communicate the urgency of change to the customer. This lack of depth in understanding and addressing real customer needs frequently stalls sales opportunities.
Challenge 3:
At the end of the sales process, sales team should be able to capture the reasonable share of the value the solution produces for the customer. However, we often find that the substance of an effective negotiation phase remains unclear. Often during the negotiation phase, unnecessary concessions are made and a lot of profitability is lost or risks are added to ourselves.
The encouraging news is that overcoming these three challenges is entirely achievable, provided there is a profound comprehension of what value selling entails.
At what level is your organization in tackling these challenges?
Marko Hänninen
