In May 2020, the US unemployment rate skyrocketed to 14.7 percent – the worst since the Great Depression. Companies across the United States are struggling as a result of months of lost revenue due to COVID-19 shutdowns. As local and global economies begin to reopen, many are wondering how and when their businesses will rebound. As a sales organization in a pandemic era plagued by budget cuts, reduced staff, and shift schedules, how do you ensure you can not only maintain your existing business, but foster continued growth? Value-based or ROI selling can help.
What is Value-based or ROI Selling?
According to Hubspot, “Value-based selling is an approach that focuses on benefitting the customer throughout the sales process. Sales reps focus on taking a consultative approach to provide value to the customer so the sales decision is made based on the potential value the product can provide.”
Rather than pitching products and services and what they can do – information your buyer has likely already found online – sellers lead engaging and prescriptive sales interactions that effectively quantify and communicate how your product or service will benefit the customer. How will your product or service help the buyer drive revenue? How will it increase organizational efficiency to save them time and money? How will it help them meet business objectives? This is the information buyers need to justify a purchase decision.
Why make the switch to Value-based or ROI Selling?
Analyst firm SiriusDecisions has found the number one reason for revenue shortfalls is not a lack of leads, sales training, or product mix – but the inability for sales and marketing to effectively communicate the value of their solutions to prospects.
Today’s buyers aren’t looking for sellers to present static or linear pitch decks with product information they’ve already found online. They’re looking for sellers to bring additional value to sales conversations. They expect sellers to effectively communicate the impact their product or service will have on the buyer’s business in the context of what the buyer cares about. When sellers can’t deliver, it creates a value gap – a divide between buyer expectations and a traditional sales and marketing approach.
As the value gap grows, the likelihood of a purchase diminishes. Without the information they need to justify a purchase, buyers often abandon the sales process altogether. In fact, a recent study by Challenger found that 40% of today’s B2B purchase attempts end in “no decision.” In a poor economy where B2B buyers have to work even harder to justify purchases, that number could grow exponentially. The only way to combat the value gap and ensure you can continue to meet sales quotas is to stop pitching products and start quantifying value.
How do I support a Value-based or ROI Selling Model?
Thinking of making the switch from product pitch to value selling? To ensure success, your value selling strategy should incorporate three components:
1. Value-focused Sales Conversations
Shifting your sellers’ mindsets to focus on value over product capabilities can be tricky. You know the saying about teaching old dogs new tricks, right? But once you get your sales team to understand the value in selling value (e.g. faster time to close, increased quota attainment, etc.), helping them formulate the sales story is easy.
We’ve found the CLOSE storytelling framework to resonate best with today’s buyers. It includes five sequential elements to help sellers formulate their value proposition with maximum impact:
Challenge, Loss, Opportunity, Solution, Evidence
The CLOSE methodology enables sellers and marketers to challenge current thinking, persuading buyers to abandon the status quo and take swift action on their proposals.
We break down CLOSE in more detail in Storytelling 101: A Guide for Modern B2B Sellers. You can download it here.
2. Value-focused Sales Content
If you want your marketers, sales reps, and channel partners to successfully speak to the unique value of your product or service, your marketing and sales content must also be designed to support a challenge-centric approach. Content used throughout the sales cycle should first discuss your buyer, the challenges they face, and what inaction is costing them each day. This impactful value messaging, insights, and justification can be leveraged as value-added marketing content and help to fuel provocative and engaging sales conversations.
As more companies embrace remote work, you must also be mindful of the format in which you’re presenting this content. Meeting with prospective buyers over the phone or via web conferencing makes it inherently more difficult to capture your audience’s attention and keep it. Leveraging interactive presentation software or a sales enablement platform that allows you to easily pivot presentations in line with what your buyer wants to talk about can help you keep buyers captivated and ensure your value proposition is heard.
3. Interactive Value Selling Tools
When developing content to support value selling efforts, many companies turn to spreadsheets to help sellers calculate and communicate return on investment or total cost of ownership. While this is a step in the right direction, it’s not always an effective or sustainable means for quantifying and communicating value to customers. High development and maintenance costs, low adoption rates, and limited version control – to name a few examples – are problematic. We dive deeper into the pitfalls of spreadsheets developed for value selling in our guide Why Spreadsheets Don’t Work available for download here.
Fortunately, ROI and TCO calculators can deliver where spreadsheets fail. These tools are easy to use and understand and can be leveraged for both marketing (self-service) and sales (guided selling) purposes to ensure your value proposition is clearly conveyed from the buyer’s first interaction with your brand through to purchase.
In many industries, like technology, using ROI and TCO calculators to capture data from the buyer in real-time and calculate the tangible benefits of a purchase has become a best practice. Commvault, an Enterprise data protection company, for instance, recognizes the risks associated with large IT investments. To help their buyers make confident purchase decisions, they provide interactive business value assessment tools like ROI and TCO calculators on their website. Prospects can use the tools to gauge the value Commvault solutions will bring to their business, with third-party validation that the estimation of benefits they’ll receive is objective.
To help prospective customers understand the benefits of cloud data management, the company’s calculators:
- Provide a side-by-side total cost of ownership (TCO) comparison for keeping your data on-premise vs. moving to cloud data management
- Quantify the return on investment (ROI) of consolidating your existing data management solutions into one cloud data management platform
- Estimate the cost-benefit of automating maintenance so your IT team can focus on priority projects
Having this data allows Commvault’s buyer to effortlessly build a compelling internal business case and convince key stakeholders to buy-in to a purchase decision.
Value-based or ROI Selling is the Future
Pandemic-era buyers are more disengaged, frugal, and skeptical than ever. They don’t care when you were founded, how many customers you have, or what product features you most recently launched. They want to know exactly how you can help them solve their unique business challenges and the bottom-line impact you can deliver.
Need help shifting your sales approach from product pitch to value selling? Contact us to schedule a workshop or transform existing spreadsheets into sleek, value selling calculators.