QUIZ: Do You Know How to Sell Value?

Scenario: Your prospects are buying from your competitor because their offering costs less. However, your offering is higher quality in every way and has some cool features that cost a bit extra. Your manager's advice is simply to "sell more value."

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Scenario: Your prospects are buying from your competitor because their offering costs less. However, your offering is higher quality in every way and has some cool features that cost a bit extra. Your manager's advice is simply to "sell more value."

The correct answer is:
Probe: Add value by asking the customer questions.
Before I explain, let's look at the other two alternatives.

Discount: offer more value by dropping your price. There's no question that dropping your price will put you back into the running against that competitor. Customers faced with a choice between a Yugo and a Ferrari at the same price will choose the Ferrari every time -- even if they only need a Yugo. Unfortunately, discounting plays havoc with profitability, because you can't make money selling a Ferrari at a Yugo price point. So this is only a last resort and not your best move.

Bundle: offer more value by including free features. Conventional wisdom says that "selling value" means "offering more product for a given price." Under this way of thinking, you win the sale by including more "value" (features, benefits, quality, etc.) so that the customer picks your product, even if it costs a little more. However, that's just another way to discount, while pretending you're not discounting. The extra features cost money to build. If you bundle them in and don't raise the price, you're simply discounting the price of the entire package. And once again, you're sacrificing profit to make the sale, so this is only a last-ditch move, not your best move.

The real problem is that you don't understand your customer, and because of that, you're letting yourself get trapped into selling on price rather value.

Here's the big secret: Selling value must be decoupled from the price.
For example, suppose Product "A" is has 2 features and is low quality, while Product "B" has 20 features and is high quality. Product "A" costs twice as much as product "B", so Product "B" has more value, right?

Not necessarily. If those 2 features in Product "A" are unique to Product "A" and are able to uniquely solve a particular customer problem, then Product "A" has more value to the customer than Product "B". In this case, "selling value" is the process by which the sales rep for Product "A" brings the customer around to the understanding that they simply MUST have those two features.

Here's another example. Suppose Product "A" and Product "B" are identical in every way, but Product "A" costs more than Product "B". So Product "B" has more value, right?

Not so fast! If the customer trusts the sales rep for Product "A" more than he trusts the sales rep for Product "B", he is more likely to purchase Product "A". In this case, "selling value" is the process of building a greater level of mutual trust with the customer.

In other words, "selling value" is the opposite of discounting, including the "reverse discounting" of adding more features at the same price. "Selling value" means changing the game so that the price is no longer important.

You need to ask more questions of the customer in order to identify where your offering uniquely addresses a customer need. That need might be financial (like something specific to the customer's business model) or psychological (like a deep need for risk avoidance). But unless you find it, you can't sell value.