Value Selling is the final stop of our product value journey. To recap the previous steps:

• Why understanding value is important for the success of your product

• A working definition of customer value

• How to quantify the value of your product

• How to validate the value of your product

• Why value storytelling is so effective

The ultimate success of a value-based strategy depends on sales execution. Unfortunately this is where many companies stumble. It often happens because sales teams are under-prepared for the challenge. Whereas it is easy to find consultants for designing a value-based pricing strategy, few get involved with implementation. Nonetheless, it is very doable; let me share a few best practices.

Creating a Value Story Begins with Customer Conversations

A value model (see part 3) is an essential tool here because the sales rep will need to select, based on their research, specific value drivers that are relevant to their customer. A typical value model may have up to 10 different possible economic impacts. Background research should help narrow that down to 2 or 3 of the most likely candidates. As you know by now, value is different depending on the customer.

Once done, the sales rep is now ready for their exploratory discussion. As part of their typical qualification questions to uncover priorities and needs, sales reps should also include prompts to test their value hypothesis. Below are examples of actual prompts:

• Your website talks a lot about your customer satisfaction. Is one of your objectives to grow repeat sales and cross-selling? (This is an example of a revenue driver prompt for a marketing automation provider)

• Other companies we serve are very interested in improving receivables management. Would reducing the number of days receivable (through automation) be something that your finance department would like to hear more about? (This is an example of an asset driver prompt for a transportation management provider)

• How are you dealing with the lack of experienced field technicians in the industry? Are you open to exploring how automation can reduce the workload on your existing staff? (This is an example of a cost/productivity driver prompt for an IoT solution provider)

At this early stage there is no value quantification involved. Sales needs only to get a qualitative read for where your product can best create value. Recalling my value definition:

An economic argument that is accepted by the customer in terms of potential incremental margin gain from cost savings, revenue growth, or asset efficiency

Sales reps should continually probe for the best economic arguments that work from the customer's perspective. Support, or even better, enthusiasm is a positive signal that your product can improve both company performance as well as the personal success of your customer/story hero.

At the same time, sales reps should listen carefully for other unexpected needs. These may relate to other value drivers from the model, in which case the conversation can pivot. Or in some cases the conversation may uncover a totally new need that your product can address but is not currently covered in the value model. This is how new value drivers are born.

At the end of this conversation, the sales rep should ask their customer contact for data related to the relevant value drivers. The sales rep may say: You know, based on my understanding of the issues we just discussed, I believe our solution can deliver measurable cost savings and revenue growth for your company. Will you help me gather some data that I can use to make a value estimate next time we meet?

So for example, using the value driver prompts from above, the specific data points needed are:

• For the revenue value driver: Current average order size; Average active contact purchase frequency, Current amount or percent of cross-selling revenue

• For the asset driver: Average billing amount per truckload, Number of truckloads per year.

• For the cost/productivity driver: Number of customer visits per year, Average cost of customer visit.

The data ask should be light and easy, only a few data points. The cost or revenue estimates need not be precise for this purpose, just a reasonable ballpark estimate. It is likely that the customer contact would not have these numbers at their fingertips. However, they can be emailed to the sales rep as a follow-up before the next call.

Confidence is Key to Value Selling

Sales reps must have confidence to lead this type of discussion. I have seen many under-prepared salespeople try to avoid this line of conversation entirely or cover it tentatively because of the risk of FOLS (Fear of Looking Stupid). Doubly so if the customer contact is a senior executive.

Yet executives are exactly who you want to engage with in a value-based conversation. At that level, measurable business impact is mostly what they are focused on anyway. They think strategically; product features are merely tactical details to them. So whether sales directly interacts with executives or not, ultimately these executives make the final buying decision. A business case is probably mandatory for any 5-digit ACV (annual contract value) deal or above.

Middle and lower level managers are the bridge to executives decision makers. To become the true hero of their value story they will need to make that business case. The drawback is that they usually lack a “big-picture” business perspective. Enter the sales rep as the value mentor. Remember, sales is “the force” that transforms their customer into the Jedi- Knight internal advocate for your solution.

The confidence required for effective value selling is directly related to the amount of training and preparation of the sales team has in two key areas:

1. How the value model works: Sales reps need to know every value driver and how they match up to the key benefits delivered by your product. In addition, they should be able to comfortably explain the inputs and equations. However, this should be easy when using simple-format value drivers (see part 3 for details).
   
   There are two practices I use to establish credibility of a value model with the sales team. First, I include them, particularly more experienced reps, in the design and development process. Second, I validate the value model via customer research (see part 4 for details). I usually record my customer interviews (by permission). This provides proof that this approach works for their customers.
   

2. Leading value conversations: This is perhaps the most important skill in value selling and should be practiced using role play exercises. Top sales performers do this naturally and are very good at:

• Asking open-end exploratory questions, to surface the major themes (needs, issues, goals) to dig deeper on

• Connecting the dots between the major themes and their solutions unique advantages (differentiation)

• Converting potential operational metrics improvements into business financial results (revenue, costs, assets, or risk)

• Providing relevant, credible proof points behind their solutions value or differentiation claims by using appropriate reference clients or case studies.

• Encouraging collaboration with the customer contact to provide constructive feedback and data to make the business case defensible.

• Inspiring confidence in the business case so the customer contact can effectively present it to senior stakeholders.

Share The Valorizer

Using A Value Story Template

During follow-on meetings the sales rep will show the customer the value estimates of the product based upon the data provided and gauge their feedback. The value estimate for any given value driver can range from minor/trivial (3 digits of value or less) to interesting (4 or 5 digits) to significant (6 digits and higher). The iterative nature of “tweaking the inputs” based on customer feedback combined with an understandable and transparent value driver formula builds credibility for the estimate. Doing it collaboratively transforms this to a customer-driven business case rather than a vendor-driven one.

Years ago it was very common to build these case studies on spreadsheets. Luckily there are now online templates available on customer value management platforms that make the customer collaboration process much easier. Here is an example of a value story template flow that has worked well:

The value story template serves as a customer-friendly front-end to the value model. It has a PowerPoint-like feel, but totally interactive. Once a few data points are input, the tool automatically displays value calculations with full transparencies. There are no “black-box” objections – if a customer disagrees with an assumption it can be instantly updated. The ability to iterate inputs in real-time is the magic that enables collaboration and aligns the customer’s perception of value.

Does this work? Yes, absolutely. I have implemented this approach with dozens of clients over the years. Some of them have had significant (i.e., 7-digit plus) profit improvement.

End of the Road?

Here ends the value-based product and strategy journey. Actually, there is a sequel. The setting is with the customer success teams, particularly for products and services that use a subscription model (as do many SaaS companies).

Although selling is still the primary use case for value implementation, several companies have been using value as a strategy to increase customer loyalty (i.e., reduce churn) and extend customer lifetime value. No doubt this is the road ahead for customer value management.