A Story of Value
Picture this: You enter a restaurant and they give you two options: a cheeseburger or a hot dog. You are disappointed because you had already done your research on the restaurant and thought there would be a salad on the menu. You order a cheeseburger without any condiments or bread.
When it comes time to get your food, another waiter shows up and brings you a hot dog overflowing with nacho cheese, chili, and ketchup. You explain that you ordered the cheeseburger without condiments. The waiter tries to talk you into the already-made hot dog. Eventually, 30 minutes later, you get the cheeseburger you ordered, secretly still pretty upset you couldn’t get a salad.
You go home and rate the restaurant a 2/10 on Google and leave a review about the lack of consistency and alignment between the person who took your order and the person who delivered it to you. No one even asked what you valued about the food itself - you were actually on a strict low sugar diet and wanted a salad so you could minimize sugar while also feeling satisfied with the meal. The condiment-less cheeseburger was disappointing at best.
Value Selling Blunders
Where did the restaurant staff go wrong? Their blunders were many. They started early in the process when they assumed the customers are all ordering food based on how delicious the food is, and they offered only two choices because the hot dog and cheeseburger were the most popular items.
They made assumptions, they acted in a vacuum, and tragically, they forgot to include the one person who really mattered: the customer. Had they taken a different approach, they may have avoided getting a 2/10 review on Google from a dissatisfied customer, potentially risking their jobs and the restaurant’s reputation.
While this story may seem the furthest thing from selling, there are many sales lessons we can take from this hypothetical story. And the most obvious is about the importance of value. And aligning on value is really the linchpin of any successful sales approach.
Value is in The Eye of the Beholder
Any conversation on the topic of value must begin with the concept of perspective. We’ve all heard the idiom, beauty is in the eye of the beholder. Value, like beauty, is subjective. It doesn't matter how great a product seems if the customer isn't interested. A common mistake in sales is focusing on features the seller likes, rather than understanding what truly matters to the customer.
In our restaurant story, it doesn’t matter that the waiter knows most customers like hot dogs and cheeseburgers. If this customer prioritizes health and low sugar foods, she isn’t going to value the other options.
In sales, this means that value is in the eye of the customer or prospect. As a result, it’s your job as a seller to ask questions and listen to your prospect or customer in order to understand what they value and ultimately help them see - and believe in - your product’s value. This also means that not everyone will value your product or service the same.
In this article we’ll provide a framework for how you can better identify what’s important for your prospects and customers and align your product’s value to what they really care about. In doing so, you’ll move your sales teams to a place where success is measured not in units sold but in customers who experience higher profits, better productivity, improved retention, and other desired outcomes.
What is Value Selling? What are the Benefits of Value Selling?
While this article is anything but rudimentary, it’s important we align on the definitions of some of the basics because they will serve as the core building blocks for our more advanced and complex topics. Let’s start with value selling, also called value-based selling or outcome selling.
Value selling is a sales approach or technique that zeros in on the expected outcomes the potential customer would gain from the seller’s product or service. This is in stark contrast to selling based on features or function.
The benefits of value selling are numerous. According to our own research, value selling will lead to a…
- 3x increase in deals size
- 61% increase in win rate
- 30% growth in expansion
Some other benefits include improved retention, shorter sales cycles, and better disqualification (thereby saving sellers valuable time that could be used on other qualified deals).
Key Principles of Value Selling
Understanding what the customer values most and aligning your product or service with those values is the essence of value selling. To help you better understand what your customer values, we’ve created the Value Validation Framework. By answering these questions in collaboration with your customer or prospect, you’ll significantly increase your chances of a successful sale.
Let’s review the Value Validation Framework (for a deeper dive on the Value Validation Framework, check out this article):
- Objectives: The overarching goals the organization aims to achieve.
- Tactics: Specific programs or projects to be employed in pursuit of the objectives.
- Problems: Clear identification of the root cause challenge to be addressed.
- Metrics: Quantifiable measures used to assess progress and success.
- Targets: Specific, measurable outcomes to be achieved.
- Timelines: Defined periods for achieving the set targets.
It’s worth reiterating here that the key to the Value Validation Framework is collaboration. Value selling is a collaborative process. It involves working closely with the customer to co-create solutions that meet their specific needs. This collaborative approach builds trust and ensures that the proposed solution is truly valuable in the customer's eyes.
Developing a Continuous Value Story
As go-to-market teams focus more on value, they should aim to align their sales, customer success, product, value management, marketing, and other customer-facing teams on a common lingua franca around value. Value should be a continuous customer experience. Instead, many organizations break it into two parts, value promise and value delivery, and often they do not line up.
The first, value promise, is an imagined future state used by sales teams to pique the interest of a potential customer. The value at this stage is unrealized. It is the job of the seller to convince the prospect that the seller’s product will, in fact, achieve some desired outcome. Sharing similarly situated customer stories (e.g., customers that bought the same solution, who are facing the same challenge, or in the same industry) is a great way to show what is possible and build the necessary trust to help a potential customer envision a future state that is better than their current state.
Value delivery, on the other hand, refers to the process of delivering real value to customers by providing them with solutions that meet or exceed their expectations. It’s a way to keep customers satisfied with their purchase. A way to show them a return on their investment. In fact, organizations that consistently deliver on value experience higher revenue, increased growth, and greater customer loyalty. (To learn more about how to deliver value, check out this article on the 5 Steps to Prepare Your Team for Success).
While value promise and value delivery are independent concepts, they work better together. The concept of a value promise is only as strong and convincing as the real examples that support it. Therefore, sales teams who are making value promises to their potential customers need to work closely with their customer success counterparts in order to share and extract the value that is delivered by their products or services. This is best accomplished by leaning into integrations between your core sales, customer success, and value selling technologies. For example, customer success teams that use Gainsight can integrate with Ecosystems and Salesforce so that sales teams have quick and easy access to readily available delivered value and customer stories.
Want to learn more about the line between sales (value promised) and customer success (value delivered)? Check out our on-demand webinar with senior executives in business value at Salesforce here.
Value Selling Results: Better Win Rates, Better Close Rates, Higher ARR & NRR
There are numerous examples of companies who understand value selling. Let’s take a look at a few examples.
HP: Engaging Early on Value
HP is a leader in technology and printing solutions that recognized an opportunity to show their potential customers the value of their solutions earlier in the sales process. By partnering with Ecosystems, HP was able to demonstrate value to customers upfront. This led to a significant increase in win rates. HP’s win rates increased by over 92% in Managed Print Services and by over 125% in Print Services. HP attributes this success to identifying value early in the sales cycle. Read more here to learn how HP partnered with Ecosystems to make such a consequential impact on win rates.
Micro Focus: Proving Value
Without the Ecosystems' platform, their close rate was at 27%, but with the use of the platform, it was brought up to 49%. That is an over 81% increase in close rates as a direct result of our platform. On top of this, Micro Focus has also seen an improvement in both win rates and deal sizes since partnering with Ecosystems, as well as their ability to drive the pace of the conversation with their customers.
Simply put by Tom Ament, President of North America at Micro Focus, now OpenText, “When we incorporate this concept, and we incorporate this better view of stakeholders and value, we get a result.”
Learn more about how OpenText partnered with Ecosystems to increase close rates here.
Qualtrics: Expanding Value Selling
Qualtrics adopted a value selling approach the moment they decided to partner with Ecosystems and their value selling platform. By leveraging the Ecosystems platform, Qualtrics is able to put value conversations in the hands of their entire sales team, while elevating value consultants into the indispensable role of value enabler. The results have been nothing short of remarkable—Qualtrics has doubled its reach and now supports two times the number of deals while simultaneously improving win rates. Learn more about the partnership between Qualtrics and Ecosystems here.
Conclusion
In a world where customers are bombarded with choices, value selling emerges as a guiding light for sales teams. It transcends the traditional focus on features and functions, shifting the conversation towards the tangible outcomes and benefits that truly matter to customers. By aligning your offerings with the customer's desired results, you not only increase your chances of closing deals but also foster stronger, more meaningful relationships.
The principles of value selling, specifically those found in the Value Validation Framework, provide a roadmap for success in today's competitive landscape. By embracing these principles, sales teams can elevate their performance and deliver exceptional value to their customers.
Remember, it's not just about selling a product or service; it's about helping customers achieve their goals and aspirations. By becoming a trusted partner in their journey, you unlock the true potential of value selling and create a win-win scenario for everyone involved.
