We talk a lot about the importance of sales reps’ selling value, rather than going directly to price. A few key takeaways from our recent articles include:
- Salespeople often struggle to communicate value and instead focus on product features and price discounting.
- To truly connect with prospects, sales reps need to think about what’s in it for the customer.
- You must drive internal awareness of your value proposition, define specific value to various customer personas, and what this means for your internal departments.
- For business customers, value is what the customer understands in terms of economic benefits compared with costs and competitive alternatives.
We discussed this on a recent episode of our weekly live show, Wholesale Change, and identified a few common hurdles, as well as opportunities, in selling value as distributors.
Challenges in selling value
Customer service reps are not negotiators. CSRs are often caught between the supplier and the customer, and their training is geared toward making customers happy. They’re not wired to negotiate. In many instances, they could have received a better price if they’d asked, but they’re not clear on the value for the price.
Account managers often start with the latest promotions. Reps can get stuck using the crutch of promotions and discounts to guide their conversations, instead of focusing on what customers need in the moment. Instead of focusing on today’s sale, they should be asking about customer pain points and finding real solutions.
Value propositions aren’t clear or granular enough. If you can’t give your CSRs and salespeople a clear understanding of the value you bring, they can’t make the connection between the feature and the benefit to the customer.
Distributors aren’t communicating economic value. Few distributors have taken the time to both understand the economic value of their product or service and then communicate that value internally and externally. Educating salespeople on the economic value for various customers, or simply noting the value on an invoice, can turn the messaging away from price alone.
Importantly, in our discussion, we addressed the concern that talking benefits and value might offend a knowledgeable customer. Your customer is purchasing the product for a reason, so you may think they don’t need to be told what they’re getting. However, consider that your salesperson has developed an understanding of the customer’s need first and it can now be a natural part of the conversation. They can marry the benefit to that need they’ve established, confirming the customer’s expectation. Or they may suggest a different product altogether to better answer that need.
Value opportunities you can sell
The value you offer customers will vary depending on your business and the customers themselves. However, here are a few examples of value many distributors already provide which you can use to flip the script from price to value:
- Lower customer receiving and warehousing costs
- Improve customer expertise through training
- Lower labor costs
- Increase production up-time
- Improve quality
- Improve safety
- Reduce customer’s inventory holdings
- Increase revenue through lead generation
- Improve manufacturing process
Understanding the value through lenses like these can give you and your salespeople quantifiable, tangible benefits to communicate to the customer. And it can align the specific benefit to the specific customer need. For instance, if your customer is concerned about improving productivity and lowering labor costs, you may have a higher-priced product that increases production up-time and will eventually result in savings.
At Distribution Strategy Group, we help distributors understand the value they provide customers, as well as how to communicate that value. Get in touch to learn more.