Is Value-Added Selling Right for your Company?

As you embark on the journey to compete more profitably based on your value, first consider the strategic challenges facing your organization:

  • The commoditization of products and the convergence of services. Buyers view similar solutions as the same, focusing on price.
  • Supply channels face relentless pressure from big-box superstores and online threats. Competitive pressure is often the catalyst for a drop in prices.
  • There is continuous internal pressure to grow market share while retaining existing customers. This creates a tug-of-war between growing revenue and sustaining profits.

The strategic forces that challenge today’s executives are seen in the tactical responses from
their salespeople:

  • Our internal research shows that selling value is the most perplexing problem facing salespeople today.
  • More than 70 percent of salespeople choose to discount versus sell value.
  • Fewer than 40 percent of salespeople can differentiate their solution.
  • Less than half of salespeople effectively communicate their company’s value proposition.

Do these challenges sound familiar? These trends and tendencies have sales and marketing executives second-guessing their go-to-market strategies:

  • Should we innovate or imitate?
  • Should we compete on all we offer or adopt a low-price strategy?
  • Can we even compete with a value-added strategy?

Value-Added Selling is one of several ways companies compete in an industry. Embracing a value-added strategy presumes that the value-added philosophy is entrenched firmly in the organizational culture. The value-added philosophy is simple yet powerful: Do more of that which adds value and less of that which adds little or no value. For organizations adopting a lean operating philosophy, a value-added go-to-market strategy is the logical next step in wielding one’s competitive advantage. This philosophy challenges its proponents with gut-check questions:

  • Do we really add value? How do we know that?
  • How do we measure this value?
  • Whose notion of value—ours or the customer’s—do we sell?
  • Can we be compensated equitably for this value?
  • Is our value unique?

Before adopting this approach, a company must ensure it is right for them and their customers. Like most philosophies, the value-added philosophy challenges its proponents with tough questions in the pursuit of its truth. Consider these questions as you discern a path forward.

Will You Commit to Engagement?

To do more of something implies action. A company cannot engage if its culture is passive or static. It cannot reach out and up if it is stuck in a comfort zone. A company cannot rest on its laurels and live the value-added philosophy. The value-added philosophy represents a dynamic and expansive flow of energy.

Companies operate either in the expansion or the contraction mode. In the expansion mode, they are growing, evolving, and emerging—becoming more of the raw material imprinted in their organizational DNA. If they are contracting, they are cutting back, retreating, and playing not to lose. With expansion, their energy and efforts are on the offensive. With contraction, their energy and efforts are on the defensive.

Will You Commit to Excellence?

A passion for excellence reveals itself in the positive addiction to doing everything well. Value-added companies make habitual what others consider a hassle. Committing to excellence means challenging the status quo: “Does this policy, procedure, or process really add value to what we do?” Excellence demands the best from people: “Is this the best and the most we can do?” This maximum performance commitment leaves no doubt about potential.

A commitment to excellence and a desperate curiosity about potential drive companies to demand more from employees’ efforts. An empowering organizational humility facilitates this pursuit. A company cannot improve unless it first admits it can improve.

Will You Commit to Effectiveness?

It is not enough to do things the right way; it is more important to do the right things from the beginning. This is effectiveness—pursuing the right things. This power of discernment—knowing what to do and, more importantly, what not to do—guides those who pursue a value-added path. Effectiveness commands disciplined effort. It means locking in on high-value priorities and locking out distractions along the way. This economy of effort ensures no wasted energy on low-value activities. These value-added proponents invest their resources in areas that create value for the customer and their company.

Will You Commit to Equity (For Buyer and Seller)?

What is value? Value, like beauty, is in the eye of the beholder. Value is the outcome of one’s efforts and energy. It is the return on investment. Value generally is expressed as a ratio of outcome to input. When someone gets as good as they give, it is a good value.

Something acquired cheaply is not valuable if it produces nothing meaningful for the person who acquires it. The lack of return makes it a terrible value. Value implies equity. Is there an equitable exchange for the time, energy, and resources someone sacrifices to acquire something else? When two people are involved in the exchange, equity demands a win-win outcome. Both must benefit in measure to what they give. If one sacrifices and the other gains, it is not a win-win. One winner implies one loser. Nothing is to be gained from a relationship based on loss. Those willing to engage actively, commit to excellence in all they do, and work effectively on equitable outcomes find that the value-added philosophy is right for them.

Is Value-Added Selling the Right Go-To Market Strategy?

Value-Added Selling is the strategic response to market forces that demand more and more for less and less. Value-Added Selling is a philosophy of doing business. It proactively seeks ways to enhance, augment, or enlarge one’s solution to meet the customer’s dynamic needs. It is contributing maximum value to and extracting value from customer relationships. It sells to the customer’s needs, not necessarily against the competition. It is promising a lot and delivering more. It is achieving a win-win outcome by pursuing equitable relationships.

The value-added strategy is right for some companies. Companies with meaningful and unique value added can wield a significant competitive advantage with this strategy. Those organizations that embrace a lean business philosophy and enjoy the operational efficiencies that come from this are especially predisposed to success with this philosophy. Value-Added Selling uniquely integrates sales and operations in a go-to-market strategy. Because it is philosophically based, salespeople are not limited by the techniques they are taught. Instead, their creativity is liberated by how they are taught to think about selling. This means they naturally seek additional ways to create and re-create value for their customers and companies. Are you ready to embrace Value-Added Selling?

Paul Reilly is a speaker, sales trainer, author of Selling Through Tough Times (McGraw-Hill, 2021), coauthor of Value-Added Selling, fourth edition (McGraw-Hill, 2018), and host of The Q and A Sales Podcast. For additional information on Reilly’s keynote presentations and seminars, call 636.778.0175 or email paul@reillysalestraining.com. Visit tomreillytraining.com and sign up for the free newsletter.

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