Most companies work hard to establish value added programs that differentiate them from the competition. But many salespeople struggle to give those services meaning. The best sellers understand both the difficulty and importance of having conversations about value in every sale.
Today’s savvy buyers are looking at a broader range of factors before making their purchase decisions. Yet, here’s why businesses who have done a good job of creating cost savings programs often find them diminished or omitted altogether in sales messaging:
1. Sellers have been product-focused. For manufacturers and distributors alike, winning new business has been a product centered challenge. “product vs. product” positioning often results in “item price vs.item price” decisions.
2. Buyers have led discussions with price. Buyers have not always been aware of, or empowered to consider, the total scope of their purchase choice. All else being equal, price remains king.
3. Total costs have been poorly defined . With sellers fixated on products and buyers on prices, it’s been rare that value and total cost have been identified.Without agreed upon value, sellers fall back on price. Without agreement on total value, services are often thrown in to help close a deal or omitted altogether. Either way, profitability shrinks and overall value is unappreciated.
Fresh Paths to New Business
Price may still be at or near the top of a buyer’s list, but the list has become longer and more complicated. Surveys of decision makers routinely cite a dozen or more factors, from product availability and order minimums, to flexibility and responsiveness, which drive the purchasing choice. This is good news for manufactures, distributors, and sales representatives. When buyers consider the total cost of doing business, deeper service components provide fresh paths to new customers. They also open new doors to conversations about retaining and expanding established business.
When I presented these ideas to a distributor sales force this spring, one of the senior sales reps in the organization told this story. After almost a dozen years of competing primarily on price, he did some reading that prompted him to learn more about how one promising customer defined value. “After all those years, I was actually nervous; I didn’t know how he’d react. But, I was tired of competing on price when we had so much to offer.”
To begin, he asked how his customer’s business defined the cost of holding an inventory. Together, they defined what it cost to place an order and to pay an invoice. Then, they looked at the freight and labor his business invested in moving materials from facility to facility. “He told me that no other sales rep had ever talked to him about his business at that level.” By getting beyond the price of an item and talking about the business expenses all companies share, he was helping move his buyer into a more cooperative and productive relationship.
For him, all it took was a little boning up on his basic accounting skills and a willingness to do things differently. In doing so, he’s joined those salespeople who use consultative selling to secure lasting partnerships with their customers.
Soon, total sales for wholesale distribution will reach $4 billion. At the same time, advances in product technologies, logistics, channel options, and electronic business across all industries are creating new and higher customer expectations for all of us. Traditional mindsets are changing on both sides of the sales equation.The time is right for salespeople to put the best of their company’s programs and services in the spotlight.
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