Step by Step Guide To Value Selling 20180919 PDF
Step by Step Guide To Value Selling 20180919 PDF
to implementing an effective
Value Selling Strategy
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Introduction
This inability to establish distinctive business value is resulting in extended sales cycles,
lower than expected win rates and deeper than desirable levels of discounting. In the
absence of clearly differentiated business value, customers are either choosing the
lowest cost option or concluding that they can carry on with the status quo.
As a result, a steadily growing number of sales organisations have concluded that they
need to improve their value selling skills. If you’re also keen to implement an effective
value selling strategy, some of the ideas in this guide may prove helpful.
We’re Inflexion-Point Strategy Partners, the UK-based value selling experts. We’ve
analysed hundreds of value selling initiatives, and we hope that you find the following
guidelines helpful. If you want to learn more, our contact details are on the last page.
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Chapter 1: B2B Buying Behaviour
For anything other than inevitable purchases, your customer typically has a number of
potential options - each with their respective pros and cons. Each of the individual
stakeholders are also likely to have different personal motivations, priorities and
decision criteria - often making it hard to establish consensus.
It’s perhaps no surprise that so many apparently promising sales opportunities end with
the customer either deciding to do nothing, or to postpone the project until some
often-undefined future date. And it’s no wonder that many studies have found that “no
decision” is now the most common outcome for such projects.
There are four key factors your sales people need to be aware of when it comes to
understanding B2B buying behaviour: status quo bias, loss aversion, decision paralysis
and the impact of early influence. Let’s consider each of these factors in turn...
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Status Quo Bias
So unless your customer has an urgent and compelling reason to act, they will usually
prefer the comfort of the status quo. It’s no wonder that so many apparently promising
sales opportunities end with the customer deciding to “do nothing”.
The implications for value selling are clear: if you are to persuade your customer of the
need for change, you need to help them recognise that the status quo is unsafe. You
need to contrast the threats, risks and consequences of their current path - the cost of
inaction - with the potential benefits of realising the significant opportunities that lie
before them - the value of change.
Why this is important: when your customer fails to recognise sufficient contrast
between their current situation and their future potential, they are likely to stick with
what they know.
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Loss Aversion
The implications for value selling are clear: you need to leverage loss aversion (and
challenge their status quo bias at the same time) by helping your customers to
recognise all the potential current threats to their business performance.
This requires that you encourage them to confront the undervalued implications of
issues they may already be aware of, as well as introducing new and previously
unrecognised threats to their strategic business goals.
Why this is important: selling the upside of implementing your solution may not be
enough to persuade your potential customer to place an order with you - you will
significantly improve your chances if you also help them to believe that staying as they
are is an unacceptably risky strategy.
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Decision Paralysis
The CEB’s latest research shows that the average number of stakeholders in a typical
high-value complex B2B buying decision has steadily risen to 6.8 - and that number
continues to rise. The implications for value selling are clear: if you cannot identify and
support a powerful champion and help the buying group as a whole to achieve
consensus around their preferred option, their decision-making process is likely to slow
down, stall or be abandoned completely.
Why this is important: The most common outcome of a complex B2B buying journey is
now a decision to “do nothing” - and the most common cause is the failure of a large
and unwieldy decision-making group to achieve a consensus for change.
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The Impact of Early Influence
Vendors that instruct their sales people to only pursue BANT-qualified opportunities
put themselves at a huge disadvantage. The implications for value selling are clear: sales
people need to be encouraged and enabled to proactively target and engage early with
people and organisations that satisfy their “most valuable opportunity” profiles and to
invest in influencing the prospect’s agenda before the emergence of a formally-defined
and funded project.
Why this is important: it’s important to ignore the naysayers who claim that the average
B2B buyer is 57% of their way through their decision process before they want to
engage with a sales person. This has never been true of complex high-value first-time
B2B purchases. The sales person who does the most to shape the prospect’s vision of
value from an early stage emerges with a huge competitive advantage.
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Chapter 2: the Customer Decision Journey
It would be convenient if things were simpler. But the truth of the matter is that in
complex B2B sales your customer’s buying processes are rarely linear, compounded by
the fact that they are sometimes poorly defined or even if they are well defined are often
not well understood by many of the decision team.
Rather following a hypothetically straight path, many customer decision journeys zig and
zag, go backwards as well as forwards, find themselves way off-piste, struggle to achieve
consensus, can be redirected by a single powerful individual and can be abandoned at
any stage along the way - but they at least tend to pass through recognisable phases.
Why this is important: You need to accept that your customer’s decision-making journeys
for significant new purchases are likely to be inherently and unavoidably complex. Rather
than blindly following a rigid, linear “sales process”, your sales people need to diagnose
where their customer currently is in their decision journey, and react accordingly...
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Phase 0: Unconcerned
Your goal in this phase of their journey must be to educate and inform the key
influencers in your key target customers by offering genuine thought leadership and
insights that serve to shape their perspectives and influence their thinking.
Why this is important: the best time to start influencing your prospective customer’s
thinking is before they recognise that they have a problem at all - and certainly before
they have established a well-defined vision of a solution.
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Phase 1: Exploring
Your goal in this phase of their journey must be to monitor these trigger events, to be
seen as a source of accessible and credible expertise, and to proactively reach out to
the affected people and organisations.
While your prospective customer may now at least be aware of the issue, they may not
be fully aware of all the implications and potential consequences. Rather than rushing in
and pitching your solution too early, it is best to first help your customer to recognise
the cost of inaction and the need for change - whilst positioning your company and its
offering as a credible and trustworthy solution provider.
Why this is important: this is the period during which your prospective customer is
most receptive to fresh perspectives. You will never have a better opportunity to
reframe their thinking and establish a reputation as a trusted adviser.
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Phase 2: Defining
It is critically important that you actively engage the customer before or during this
phase - prior to their issuing a formal tender or RFP document, after which it is often
too late to reshape the customer’s thinking. If you do this effectively, you will
dramatically increase your chances of winning their business.
But if you don’t become aware of or involved in the opportunity until the next
(selecting) phase - when the customer has already issued an RFP or tender document
and is already shortlisting their preferred options - you need to carefully consider
whether you have any realistic chance of winning on anything other than a “lowest
quote” basis, and whether you really want that sort of low-profit business.
Why this is important: research by Forrester concluded that the vendor that did the
most to shape the prospect's vision of a solution and establish distinctive value prior to
the selection process ended up winning 3 out of 4 subsequent purchase decisions.
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Phase 3: Selecting
You need to be keenly aware of the potential for decision paralysis: In addition to
promoting the merits of your proposed solution and establishing the business case, your
role during this pivotal phase is to ensure that all stakeholders agree on the need for
change and see the distinct advantages of your approach from both their individual and
their collective perspectives.
And because your proposal may subsequently be evaluated by stakeholders that you
have never met or influenced, and who may be questioning the necessity or relative
importance of the project, your executive summary needs to sell the need for change as
well as explaining the unique value of your proposed approach to the functions and
departments represented by each of the key decision-makers.
Why this is important: successful proposals must appeal to every stakeholder, and
promote the need for change as well as selling the benefits of your solution.
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Phase 4: Verifying
This is not just about securing the best possible commercial or legal deal - it is also
about getting to the bottom of any and all perceived risks or concerns that are
associated with either the project itself, the chosen vendor and the chosen solution.
These reservations may be unspoken - it’s your responsibility to flush them out.
And it’s equally vital that you enter any commercial negotiation with a clear strategy and
clear boundaries - as well as ensuring that you get all of the customer’s issues on the
table before committing to any concessions, and managing the negotiation as a
balanced exchange of mutual value and not as a series of “gives” from your side without
any matching “gets” from the customer.
You may have eliminated all your other obvious competitors as far as this project is
concerned - but you also need to make sure that your project’s business case and
executive sponsorship is strong enough for it to emerge at the top of the customer’s list
of spending priorities. If you fail to pay due attention to this, there remains a real danger
of the project falling at this last hurdle.
Unfortunately - and particularly if your sponsor is unfamiliar with steering projects of this
nature through the confirmation process - they may find themselves outmanoeuvred in
this final run-in by other vested interests. It is in your interest to ensure that you prepare
them and support them and that you do not assume that they can make the strongest
possible case without your help.
Why this is important: your strongest competitor during this final stage is the idea that
they might spend the money on another project - or avoid investing at all.
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Chapter 3: Implications for Value Selling
And when customers see little difference between the path they are currently following
and their future potential, they will be inclined to downplay the need for change and to
decide instead to stick with the status quo.
You need to equip and enable your sales people to identify and target their most
valuable prospective customers, to position and differentiate your solution in a way that
sets you apart from the crowd, to identify and engage their key customer stakeholders,
and to progressively enable both your sales process and your customer's buying
decision journey.
That's why defining, identifying and pro-actively targeting your most valuable
opportunities is the essential foundation of any successful value selling initiative. The
opportunities you choose to pursue must satisfy three critical criteria: they must have
the potential to buy something that you are offering, they must be willing to buy from
your organisation, and the effort required to win their business must be worth it.
The process of targeting your most valuable opportunities involves four key elements:
your prospective customer's most important issues, your most valuable target
organisations, the most valuable and influential roles within these organisations and the
most significant trigger events that are likely to result in customer action.
Why this is important: many sales people waste a huge amount of effort pursuing
“opportunities” that - with the benefit of hindsight - were never likely to buy from them.
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Positioning Your Distinctive Value
This tendency towards "premature elaboration" has been the ruin of many apparently
promising sales opportunities. If it is a significant purchase, and if your customer takes
their decision-making seriously, they are going to take their time. Rather than racing
ahead of their buying journey, your sales people would be far better advised to first
invest in establishing your distinctive value.
You need to lead your customers on a value-creating journey that first understands the
key trends affecting them, anticipates the issues these are likely to generate, identifies
the obstacles that stand in their way and the consequences of failing to deal with them.
And then - and only then - you need to pivot to identifying the changes they need to
make, recognising the options that are open to them, promoting the capabilities they are
going to need and establishing the unique value potential of your approach and solution.
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Engaging the Key Stakeholders
But that's not enough - and focusing on questioning and ignoring or downplaying the
other essential elements of effective business conversations can make for a very one-
sided and unproductive interaction.
If you are to build meaningful rapport with your customers, as well as asking well-
chosen, well-timed and high-impact questions you also need to equip your sales people
to share stimulating insights, tell relevant stories and come to the conversation well-
equipped to answer your prospective customer's predictable questions.
And - given that we have seen that the typical complex buying decision involves an
average of 6-7 stakeholders - you need to identify and engage them, either directly or
(often more effectively) with the support of a powerful business sponsor and change
agent.
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Chapter 4: Enabling Value Selling Excellence
A continuation is much more common, but much less valuable: the customer agrees to
keep talking, but fails to make any other significant commitment. An advance is far more
desirable: your customer commits to invest their time, resources or political reputation to
move the buying process forward in a specific and tangible way.
It's all too easy for opportunities to get stuck in "continuation" mode, in which there is
continuing dialogue, but no meaningful progress - and all the evidence shows that the
longer an opportunity remains in this mode, the less likely it is to close.
If you are to progressively advance every sale - or recognise as soon as you can that you
are unlikely to win - you first need to accurately diagnose where your customer is in
their own decision journey, have a series of value-creating conversations, successfully
perform a series of critical sales plays, be clear-minded in your plans, and implement
proven policies. You can learn more in the following pages...
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Aligning Sales Stages with Buying Phases
To succeed, you have to accurately diagnose where your customer is in their journey and
identify and assess the motivations of the key stakeholders. You need to align your sales
stages with the customer’s buying phases. Your sales people need to facilitate the
customer's evolution from being unconcerned through to progressively helping them to
answer the critical questions "why change", "how to change", "what to change to" and
"when to proceed" - and all the while leading towards, rather than with, your solution.
Perhaps most important of all, you need to guide your sales people in what best practice
has proven they need to know and do at each stage along the way in order to maximise
their chances of success. This is not just for new hires - even experienced sales people
can find themselves forgetting or omitting to do something they later recognise to be
important...
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Value-Creating Conversations
In short, every sales conversation needs to create distinctive value for your prospective
customer. It must make them want to learn more, and it must persuade them to commit
to a meaningful advance or next step.
This implies that your conversations - particularly in the early phases of your interaction
- need to be biased towards their situation: their issues, challenges, threats and
opportunities, and the respective implications of staying as they are or taking action.
It also implies that you always need to be teaching them something useful and not just
seeking to learn from them. And it certainly rules out the traditional “20-questions”
approach to consultative or solution selling.
Before you can realise the value of selling something to them, they need to recognise
the value of having a continuing relationship with you...
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Critical Sales Plays
These sales plays may sometimes blur and overlap. But each has a critical contribution
to make to the chances of ultimate success in a complex B2B sale. If any one of these
plays are missed, rushed or mismanaged, the probability of failure increases. If multiple
plays suffer in this way, the probability of failure is compounded.
That’s why any successful value selling initiative needs to establish shared best practices
- often contributed to by proven top sales performers - in a form that makes it easy for
every member of the sales organisation to recognise what they need to do during each
of these phases.
Why this is important: in the absence of shared best practice, every member of the sales
organisation has to work out what to do through trial and error - something that is
particularly challenging for new sales hires or partners.
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Clear Sales Plans
But perhaps the greatest practical impact comes from insisting that sales people prepare
a clear plan for every significant customer meeting. Who are the participants, what is the
purpose of the meeting and what is the agreed agenda? What insights do they plan to
share, what stories do they plan to tell, what questions do they plan to ask, and how do
then intend to respond to their customer’s predictable questions? Perhaps most
important of all, what customer commitment do they want to achieve?
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Effective Sales Policies
These include how to respond to price requests, how (and when) to conduct demos and
how (and whether) to respond to unanticipated requests for proposal (RFPs).
You may have others that are relevant to your particular sales environment. These are all
areas where your organisation's accumulated expertise can help individual sales people
to react in the most effective way when faced with a range of predictable circumstances.
Why this is important: In the absence of clear policies, sales people - particularly the less
experienced ones - can find themselves making decisions on the fly that end up leading
their sales campaign down an unproductive and potentially irreversible path. Clear
policies enable them to make smarter choices that are backed by the accumulated
wisdom and experience of your entire organisation.
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Chapter 5: Our Approach
Our highly efficient initial discovery process will rapidly assess your existing systems and
approaches and identify immediate opportunities for improvement. Then we'll design
and develop a custom implementation of our value selling system® that reflects your
unique business environment and priorities.
We'll then work with you to ensure that every member of your sales organisation is
highly motivated, fully trained and completely confident in adopting the new approach.
And we'll put a plan in place to ensure that you continue to refine and improve your
organisation's value selling performance.
This need not be (and typically isn’t) a long and complicated process. Our approach is
designed to ensure that you start to see tangible benefits from your investment in value
selling as quickly as possible - and that the return on your investment continues to
grow as time goes on...
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About Us
I'm now enjoying the opportunity to work with clients that represent the new generation
of B2B-focused sales organisations - helping them to implement the proven principles of
value selling in ways that are allowing them to differentiate their offerings, stand out
from the crowd, attract and win new customers and increase lifetime customer value.
If any of the principles in this short guide have resonated with what you want to achieve
with your own sales organisation, please visit our website, get in touch at bob@inflexion-
point.com or book a call here: http://www.inflexion-point.com/book-a-call.
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