Value Selling: The Ultimate Guide to Value-Based & Value-Added Selling

The world is more interconnected than ever before. In many ways, this is excellent for business. Everything from supply chains to the hiring process has been streamlined and sped up. But this quick connectivity has created a distinct problem. Just as your company has many more options when it comes to choosing vendors and employees, your potential customers have access to more buying information and according to all major technology analyst firms are 60% or more through the decision process before they knock on your door.

Meanwhile, sales organizations are struggling to keep up. In April 2020, Dimensional Research conducted a value management survey of 203 qualified individuals working at B2B SaaS companies with more than 50 sales reps in sales, sales enablement, or value consultation leadership roles. The findings noted that 82% of customers ask for value tools beyond what these organizations can provide. Not surprisingly, they also report that over 90% of sellers say they struggle with value management.

It’s clear that many companies face challenges with their sales approach and fail to meet customer expectations. Combined with the sheer amount of competition in most industries, meeting sales quotas becomes challenging. In 2020, less than a quarter of sales professionals managed to exceed their sales quotas.

Having more competition is simply a fact of the modern world. What sets successful businesses apart today is their ability to meet the client where they are and walk them through the sales process. With the right sales strategies, your company can take advantage of the large and impersonal field and offer a customized presentation. While many companies rely on broad, scattershot sales methods, putting more care into your approach can be a game-changer.

That’s where value-based selling can help your company succeed. Here’s everything you need to know about value-based selling, how to implement it in your business, and why it makes all the difference to both you and your customers.

What Is Value-Based Selling?

The definition of value-based selling is far more straightforward than you might think. Instead of pitching products alone, value-based selling focuses on how the product or service will provide value to the customer. The goal is to focus on the customer’s needs so that they can make a decision based on the potential value they’ll get out of a product.

This strategy allows your business to address some significant complaints and needs expressed by customers in research on the importance of customer value management:

  • Only 31.8% of customers say their sales reps exceed expectations.
  • ‌Only 23% of buyers look to “Vendor Salespeople” as a top-three resource to solve business problems.
  • 92% of buyers want to hear a value proposition early in the sales cycle.
  • Only 31.9% of buyers feel there is significant differentiation from one vendor to the next.
92% of buyers want to hear a value proposition early in the sales cycle.

Value-based selling can make a substantial difference in how customers view a potential purchase. Other sales approaches focus heavily on the product itself but often fail to differentiate between customers’ unique needs. The value selling approach not only helps you better pitch to clients but also enables you to choose your target market more effectively.

An example might be a product that helps your customers get one additional sale per month. If you’re pitching to a company that makes many $100 sales per month, one extra sale is relatively low-value. On the other hand, if you’re pitching to a company that currently makes a single $100,000 sale monthly, your product is precious.

The value you’re selling is how the product or service can help your client. By taking the time to learn about your leads’ needs and explain exactly how your product will help them, you can make your product stand out.

Value-based selling has another significant benefit: when properly implemented, it’s one of the most effective methods of Customer Relationship Management (CRM) during the sales process. Because the entire sales technique seeks to help the customer, there’s a natural tendency to focus on their experience. The result is a better customer relationship, with trust built-in from the beginning.

Selling Value Over Price: History and Growth

For all the benefits of value-based selling as a concept, it is still a relatively new approach in the business world. Unlike other sales methods, value selling involves significant interaction with each potential client. Here’s a brief history of the evolution of sales methods and how value selling became the most robust alternative for many modern businesses.

value selling journey graphic

‌The evolution began with technical Product/Feature Selling decades ago — when there was a relatively straightforward way to map a product capability to a specific problem. This is perhaps the oldest sales method around: someone needs to tighten a screw, so you sell a screwdriver.

As problems became more complex, buyers and sellers increasingly relied on Solution Selling to define and scope requirements and design more sophisticated solutions. When there are ten screwdriver sellers in the area, simply providing a screwdriver isn’t enough. Instead, you need to tailor your screwdriver to specific situations, like offering a short-handled model for tight spaces or a magnetic head to keep screws from getting lost. You’re not just providing a product or service; you’re providing a solution to a specific problem.

As competition stiffened further, a Generic Value Selling model appeared — where sellers provided buyers with generic examples of the value achieved by other organizations. But these generalized value propositions were not specifically relevant to each organization; they did not always account for industry, geography, size, or use-case variations. You explain how a previous company used your short-handled screwdriver, but you don’t explicitly research future customers’ needs.

This led to Specific Value Selling methodologies that enabled sellers to quantify value and customize it for each opportunity. You connect with potential clients and research their needs and goals. From there, you put together a value selling presentation that explains exactly how your product will add value to their company. Your short-handled screwdriver can save them 20 minutes daily, leading to a 5% increase in efficiency and lower costs.

Agile Customer Value Management and value-added selling complete this evolution. Specifically, CVM brings organizations to the level of Differentiated Value Selling. In this case, value is quantified for a specific project, including differentiation from other alternative uses of the budget, such as direct competition or alternative uses of capital. You compare the cost of your particular short-handled screwdriver to the cost of other solutions for a specific project. The comparison lets you demonstrate precisely how your screwdriver is the best at providing value.

Benefits of Value-Based Selling vs. Other Models

Value-based selling takes effort and skill, which is what makes it both so effective and less common. Untrained salespeople with little expertise can implement simple solution selling or feature selling methods. However, these methods also perform worse than value selling on several important metrics.

IDC recently published a research report noting that value selling at a cloud-based software company led to a 70% improvement in close rates with net-new accounts. It also led to improved upselling close rates, rising from approximately 70% to 75%. That’s a significant increase, especially in a field that is becoming more crowded by the day.

The difference is simple: your prospects don’t like change. Change is hard, it takes time, and it costs money. Overcoming your prospects’ resistance to change can make all the difference to your sales metrics. Studies have found a clear set of rules for how people decide to make a change, both individually and in a business. The Dannemiller model for change management identified an equation:

dannemiller model equation in value selling

‌Essentially, change only occurs under specific circumstances. A person’s dissatisfaction with their current situation must outweigh their resistance to making the change. If that person has a clear vision for how they want things to change and a list of the steps they need to take to get there, it’s much easier to overcome that resistance.

Why Make the Change to Value Selling?

Suppose you or your company are currently using one of the previous sales models. In that case, it may seem like a lot of work to make the transition to a fully differentiated value selling model. After all, it requires dedicated research and sales conversations with each potential prospect.

However, out of all the above selling methodologies, differentiated value-based sales see the best results, by far. Value selling excels at providing a clear vision for the future and the steps needed to get there.

Solution-based selling only provides a vision for the future. Feature-based selling only offers steps toward an uncertain result. Value-based selling takes care and effort, but the result is a much more convincing pitch to prospects because it overcomes their natural resistance to having to change.

So, it’s clear that value-based selling is a valuable tool for building your customer base and closing more sales. Here’s how you can start integrating the concept into your own business.

The Value Selling Approach

Value selling positions the salesperson as a consultant, guiding the prospect through the purchasing process to find the best solution for their needs. For this reason, some people also refer to value selling as “consultative selling” because the salesperson adds value throughout the selling process.

This is significantly different from the traditional sales approach, in which the salesperson views the customer in an almost adversarial light. In older sales methods, the goal is simply to convince the client to make the largest purchase possible without much thought to the future. However, this can lead to overpromising and failing to deliver or to customers losing trust in the salesperson’s credibility.

To approach value selling effectively, it’s crucial to move on from this attitude. While you’re still trying to make sales, you’re working with the client. You’ll see much better client retention rates and build lasting trust when you focus on what your clients need instead of what will lead to the highest numbers in the short term.

Value-Added Selling

Value-based selling is intimately connected to value-added selling. While the two sound interchangeable, they are different but related strategies.

Value-based selling is the term for the overarching process of presenting your product or service in terms of the value it creates for customers. Value-added selling is the specific selling process during which the salesperson takes steps to provide customers with value at every stage of the selling process.

The philosophy of value-added selling is the natural extension of value-based selling. When your sales organization is focused on showing customers how your offerings will create value, paying attention to other ways of creating value becomes easier. To connect with clients and build relationships that lead to sales, your team can offer valuable insights and resources instead of just focusing on short-term goals.

Positioning your sales team as trusted advisors for prospects is the beginning of consultative selling. A salesperson who offers advice, resources, or services before a lead makes a purchase earns that prospect’s trust. Trust is critical to the selling process. A prospect who trusts you is a prospect who’s more likely to make a purchase.

Finally, potential customers view salespeople as the face of your company. A sales team with the training, permission, expertise, and resources to help prospects even before they’ve made a purchase is a sign of a company dedicated to its customers. Integrating value-added selling as a fundamental element of your sales approach sets your company apart from the very first contact.

Business Value Selling

Value-based selling has its uses in every market, but business value selling has some unique features. Unlike consumer markets, businesses function in a world of numbers and metrics. In some ways, this makes your job easier — you don’t need to fight against vague promises of “value” offered by your competitors. If you have a solid unique selling proposition (USP) and current happy customers, you should have plenty of data to prove your ability to provide value.

However, you also need to overcome several hurdles. Many businesses focus on their immediate bottom line, so they may be particularly resistant to changes with an associated cost. Furthermore, you may have to put in significant effort to convince a company with a current solution that upgrading is worth the effort of updating their entire workforce.

Value-based selling, on the other hand, considers these elements in advance. The process of identifying the value you can offer your prospects provides a clear vision for the future. At the same time, your presentation on the subject gives them the steps to get there. Meanwhile, when you identify prospects, you are preselecting potential customers who will get a value that outweighs the cost of buying the product. An effective salesperson can combine those three points into a sales presentation that’s primed to close the deal.

Value Selling Framework

To fully integrate value-based selling into your business, you need the support of a holistic framework. It’s easy to lose sight of the ultimate goal of value selling unless you’ve built your sales process around it. Implementing a successful framework can make the difference between a simple solution selling approach and genuinely achieving a value selling sales methodology.

The value selling framework allows you to fundamentally change your approach to sales. Here are the four elements upon which you can base your value selling approach and build a practical sales framework.

Understanding Your USPvalue selling framework graphic

Before you can even begin to approach a prospect, you need to have a clear understanding of your own product or service. What is your unique selling proposition (USP)? What sets you apart from the competition? How can you provide value? Understand and believe in your USP before you approach a client, or you’ll miss the primary point of value selling.

Focus on Research and Knowledge

The next element of the value selling framework is a dedication to genuinely understanding your clients’ needs. Do your research, and take the time to fully grasp how your clients actually function. Combined with an in-depth understanding of your own offerings, that allows you to provide prospects with a thoughtful, genuinely helpful proposal.

Dedication to Teaching

With all of the knowledge you’ve accumulated, you can become a significant resource to your customers. That should be the primary focus of your entire sales approach: providing your clients and prospects with genuine value.

Your prospects are constantly receiving sales pitches and time-wasting “follow-up” messages that offer nothing of value. You can easily stand out from the pack by avoiding insubstantial points of contact and only reaching out when you have something meaningful to say. As a result, your prospects and clients will see you as a resource, not a nuisance.

Quality Over Quantity 

Value selling takes more work, but it gets better results. By focusing on quality over quantity, value-based selling helps you close a higher percentage of deals with better terms and higher-quality customer relationships. Build the time it takes to manage value-based selling into your schedule, so you can plan ahead.

There are several places to take time to improve the quality of your sales conversations. For example, take more time preparing every email to every client to ensure you’re actively providing value with each interaction. You can and should also set aside significant periods to research and learn about your client. That time may not lead to immediate results. Still, when you finally make your sales presentation, it will pay off with dividends.

Value Selling Methodology

Once you’ve integrated the value-based selling framework, you can begin the process of actually connecting with customers and putting things into practice. This is the point where you find the actual value you can provide for a given customer.

There are four simple ways you can pinpoint the value you provide to your clients:

  • Money made: With business value selling, you can heavily focus on additional money your product or service will help the prospect make. If your offering will help them earn $100,000 quarterly, that’s a clear, numeric value that will appeal to many companies.
  • Money saved: Saving money can be even more valuable than earning money. If you have an offering that will help your potential customers save money, emphasize those numbers to take advantage of their tendency to avoid loss.
  • Risk reduced: Different industries and potential customers have varying levels of risk tolerance. Suppose you can prove that you can significantly, demonstrably reduce the risk the prospect’s company may face. In that case, you can get a strong response from risk-averse groups.
  • Qualitative value: Sometimes, you provide value you think is worthwhile but which can’t be summed up in a number. This type of value is still important, but it’s best paired with quantitative value. If qualitative improvements are your primary offering, you will need to lean heavily on your prospect’s current pain points and demonstrate the value of relieving those issues.

value selling methodology graphic

You’ll notice an element that’s not included: comparing your product to your competition. You’re not trying to show that you provide more value than a competitor; you’re trying to show that you offer a unique value. You’re differentiating your offering from the market. Instead of bringing up other solution providers, focus on the relationship between yourself and your prospect.

So, how do you go about finding these values?

Value-Based Selling Techniques

By using the following five techniques, you can connect with your customers and determine the actual value you offer them.

Do your homework. Before you make your first contact with a potential prospect, you should know them and their business inside and out. Some elements you need to know before you first reach out include:

  • The role and experience of the specific person you’re contacting (LinkedIn is an excellent resource)
  • Any connections you and your prospect have in common
  • Their company’s current status — check press releases on their website and search the news for any mention of the name to find out about recent developments
  • Their company’s current focus
  • The company’s preferred metrics
  • Their competitors in the industry and those companies’ focus
  • Any previous interactions your company has had with theirs

You can and should collect this information in a single place as a reference sheet. It will help you both in your initial conversations and when you finally put together a full value-selling presentation.

Always be personable. The most straightforward rule for any salesperson is to focus on being polite and friendly throughout the sales process. For value-based selling, it’s even more critical. Why? Because you’re positioning yourself as a consultant, not “just” a sales representative.

You want your prospects to feel comfortable reaching out to you with any questions or concerns they may have. As an added benefit, by working to be friendly and approachable, you open the door to simplifying your research process. It’s much easier to directly ask about someone’s needs and job duties when you position yourself as a colleague and consultant.

Be worthy of the trust you ask for. When you position yourself as a consultant, you’re asking your prospects to offer you a lot of faith. Acting as an expert implies that you expect other people to trust that you know what you’re talking about. Many people are willing to extend that trust to you, but only once.

If you claim you know everything about a product line when you’re working on a sale, you should be able to back that up. It takes very little to break a client’s trust, and it’s difficult to get it back. Work to build up your knowledge and experience so when prospects have questions, you can give them a concise, confident, correct answer every time.

Meanwhile, if you don’t know an answer off the top of your head, don’t fake it. Instead, tell the prospect that you’ll find out the answer right away. Admitting that you don’t know something helps build trust by proving you won’t give wrong information just to hide a hole in your current knowledge.

Listen before you speak. If you are transitioning away from older sales models, it may be tempting to begin your sales pitch as soon as you start talking to a prospect. However, that leads to a significant lost opportunity. Open the dialog by asking about their needs and situation. You can learn directly from them what solutions they need to succeed. Some practical questions include:

  • How do you measure or record the impact of company initiatives?
  • What changes do you want to see?
  • What would you save to see specific improvements?
  • What is the cost of your current solutions?
  • Who and how are your current problems affecting business?

‌Each of these questions allows you to learn about how your prospect is currently suffering and how you can improve their life. As a result, when you direct them to your product or service, you can hit on specific points they mentioned. Instead of a pitch tailored to the company’s online presence, you can present solutions to problems only an insider would know about. That automatically helps your suggestions stand out from the rest.

Make an educated guess. You now have a mix of hard numbers, familiarity with the potential customer’s needs and wants, and a sense of how their business operates. It’s time to put together some educated guesses for the genuine value you can offer them.

Hard numbers will likely include money made or saved. For example, you might offer them a way to increase their sales by a certain percentage, which increases their revenue. You can estimate based on the company’s current worth or numbers the prospect gave you.

You can estimate money saved by comparing the salaries of staff who are wasting time with the amount of time you can save them.

Finally, you can offer qualitative value: your offering will improve employee morale, which is hard to quantify but has many trickle-down effects.

You can and should find value for as many of these categories as possible. Everything you can identify is one more fact you can include in your eventual value-based selling presentation.

Value Selling Presentations

The value-based selling presentation is the culmination of your entire sales process. You’ve done your research, you’ve put together an educated estimate on the value your service provides your particular customer, and you’ve made a firm contact. Now you can provide your prospect with a presentation that shows them exactly how your company will help them.

Structuring a Value Selling Presentation

A value-based sales presentation has three fundamental parts:

  1. A short introduction explaining the problems the prospect is currently facing
  2. A detailed explanation of the value you can provide to your lead, including how you can solve their problems
  3. A brief discussion of the price that anchors it firmly against the value you provide.

Across these three elements, your presentation should accomplish two things. First, it needs to demonstrate clearly how choosing your company’s product or service is the best (and even only) way to solve your prospect’s problems. Second, it should introduce the value your solution offers so that it’s evident that the pricing is fair.

The simplest way to do this? Slide presentations. Here are a few of the benefits of putting together a value selling PowerPoint for your next presentation:

  • Convenient organization. The format of a value selling slide presentation allows you to focus heavily on the most critical parts of your value proposition while still leading the client through your sales pitch. You can produce several slides explaining the different types of value you offer while leaving the pricing information for a simple slide at the end.
  • Easy to present in-person or remotely. While explaining your value in person is often preferable, it’s not always possible. A value selling PowerPoint can be just as easily presented remotely with screen-sharing tools as it can in person. Meanwhile, you can quickly send the slides to your prospect afterward to use as a reference.
  • Opportunity for high-impact visuals. Many people have a hard time accurately comparing numbers without a clear visualization. With the visual medium of a PowerPoint, you can clearly show exactly how much value you provide for the price of your product or service.
  • Allows for the possibility of templates for similar organizations. Finally, slide presentations are easy to customize, edit, and rearrange. After you’ve put together a few successful value-based sales presentations, you can combine the most valuable slides into a template form. That will allow you to focus your time on research in the future, needing only to customize your template instead of reinventing the wheel.

Value Selling Examples

Every value-based selling experience will be unique. That’s the fundamental nature of the approach. However, some companies have excelled at using value-based selling online in the B2B market. Here are two examples of how companies are applying this strategy more broadly.

UPS

UPS has been named one of the top 20 most valuable B2B businesses in the world, and for a good reason. The company has straddled the line between offering clients customized solutions while still remaining true to their core competency: shipping. Their small business page is an excellent example of how to open the door to value-based selling while allowing customers to come to you.

ups value selling example

‌First, the page makes its target audience clear from the beginning with a snappy opening line. It then goes on to list several of the general benefits UPS offers before presenting a value-added selling call to action.

By offering a free brainstorming session to start-ups, UPS provides value from the very beginning. This also invites potential customers to contact the sales team and share information about their needs. The result is a page that lays the foundation for excellent value-based selling.

Microsoft

Microsoft is a company that many businesses view as a given part of their own operations. Windows computers and the Office suite of products are ubiquitous in many industries. However, with the rise of competitors like Google’s suite of office products, the company has taken steps toward value-based selling.

microsoft value selling example

‌Similar to UPS, Microsoft uses value-added selling techniques from the beginning by offering a free guided tour of their products, customized depending on the prospects’ needs.

If the prospective client goes to “Plans and Pricing,” Microsoft outlines its features and connects them in different suites for different needs. For example, they assume every business will need some form of email solution. In contrast, only some companies will care about advanced security or device management options.

microsoft value selling example 2

‌They also offer the opportunity to speak with a sales team member at multiple points, so there’s always the opportunity for customers to get individualized attention. The free FastTrack deployment assistance program, for example, helps enterprises switch to Microsoft with ease and reduces the resistance to change.

Check out more value selling examples from top brands.

Value Selling Questions

Why is it important to sell value rather than by price?

When you sell by price, you focus the customer’s attention on the cost of your product. Both individuals and teams alike are prone to loss aversion, a quirk of psychology that makes a potential loss seem much more painful than a potential gain seems rewarding.

When you direct a customer’s attention to price, you remind them that your product will cost money. On the other hand, when you sell based on value, you focus their attention on a significant potential gain. Only then do you discuss the price, after you’ve convinced them that your value is substantial. This helps avoid triggering the loss-aversion response and allows you to charge based on the value you offer instead of current market prices.

What are value selling and consultative selling?

Value selling, or value-based selling, is a sales strategy where you focus on the value your customer can gain from your product. It is considered a type or subset of consultative selling.

Consultative selling is a more general approach, in which you prioritize the relationship with your customer over specifically pitching a product. When you use consultative selling, you open dialogs with customers to discover their needs and requirements. That lets you present solutions to their specific problems instead of generic concepts.

What’s the benefit of knowing your business’s value?

When you understand your business’s USP and value, you can begin to perform value-based selling techniques. You can’t explain the value your company can offer to someone else unless you understand it yourself. On the other hand, with a clear understanding of and belief in the product or service you offer, you can make a convincing presentation to any potential prospects. All it takes is a little time spent researching their needs.

How do you create sales value?

Sales value is a broad concept. Anything you do during the sales process that makes the prospect’s life easier or solves a problem for them adds sales value.

For example, offering a free consultation on a problem is a method of adding sales value. Providing access to resources and information during the sales process adds value. Even offering a listening ear for your prospect’s problems adds value if you help them feel better or offer a solution. Focus on the customer’s experience, and you’ll add value naturally.

Summary

Value-based selling is one of the best solutions to current market conditions. As competition continues to increase, finding points of differentiation is crucial to building a customer base that trusts your offerings and is loyal to your brand.

By doing your research, focusing on value-added selling, and providing a clear explanation of the exact value your offering will provide to each specific customer, you develop that differentiation. You place your product or service in the context of a company that is dedicated to its customers. Best of all, you make it clear to each prospect that you have the attention to detail that’s becoming rarer by the day in an automated world.

With the right tools and tactics, value-based selling can become the core of your sales model.

If you want to learn more about providing value for your customers, you can read more in the free eBook Unleashing Customer Value: Your Guide to Agile Value Management, or schedule a free customer value management assessment today. Or, if you want to do an initial ROI analysis of what scaling value selling could mean for your business, visit our Web Value Calculator.