- It’s all about price these days – how are we supposed to compete?
- We’d sell more if only we could match our competitors on price.
- They loved our product and service but we lost out on price.
Sound familiar? For many businesses, the easiest explanation for lost sales opportunities is price. But is price playing the role of scapegoat, the simple solution to a much more complex problem?
The Price Issue in Perspective
Price is generally only a real issue if you are simply not competitive. If all your customers really are telling you you’re too expensive there might well be a problem. If it’s just your sales people telling you, you might want to think carefully before reacting! Even so, do you really have to be the lowest price to be winning business? Do you really want to be the cheapest?
If you do want to be the cheapest, what are you going to do when someone comes along who is cheaper than you are? If you are going to be a solutions provider, how are you going to establish your reputation and competitive edge?
And what about the Sales Team?
Wherever you choose to be, does your sales team have the knowledge, skills and capabilities to support your strategic intent? As your strategy moves away from a pure price platform, do they have the ability to identify and then communicate your value proposition, tailored to individual needs? Can they sell on value rather than just price?
Selling on Value
To sell on value effectively requires sales people who are not only highly skilled in a consultative/strategic sales approach, but sales people who are playing at the top of their game. Potentially, a large part of your value proposition will be embodied in them. Does your sales team currently add value to your customer relationships?
Emerging Sales Competencies
Recent research has highlighted the competencies that your customers are beginning to increasingly value. These are seen as potential relationship differentiators and value enhancers and are becoming essential for today’s professional, value adding seller:
- Aligning customer/supplier strategic objectives by identifying opportunities that add value to the relationship from both parties points of view
- Listening beyond product needs and seeing value adding opportunities along the supply/value chain
- Understanding the impact of financial decisions from both parties points of view and being able to quantify these
- Orchestrating organisational resources and co-ordinating and encouraging the development of collaborative, customer-focussed business relationships
- Consultative problem solving by understanding the customer, and the customer’s business, in depth and bringing creative and innovative product and service solutions that add real value to the business
- Establishing a vision of a committed customer/supplier relationship by identifying value-adding products, processes and service
- Engaging in self appraisal and continuous learning in order to constantly stay ahead of the game
Source: MOHR Inc research project – 21st Century Sales Competencies
This is not to say that the traditional competencies are now unimportant. They are the foundations of this new 21st Century approach.
What is needed?
To be able to sell on value effectively requires three key elements to be in place:
- An effective, consultative/strategic sales process not just in place, but implemented across the business
- An understanding of value – what is it? What are the customers needs? What are the underlying issues for each of these needs? How does this customer perceive value? What are the value drivers for them?
- A sales force with the skills and competencies in place that allows them to utilise the sales process and to understand and communicate value to their customers in a highly professional and persuasive manner.
It is no longer enough to simply reinforce existing skills and capabilities. Success in the future will be increasingly dependent upon the development and practice of new competencies and the ability to understand and communicate customer focused value propositions.