Due to COVID-19 and the current economic downturn, sales reps are facing a new set of challenges due to uncertainty. A recent LinkedIn survey of more than 500 sales professionals indicates:
- 51% of customers are experiencing budget cuts.
- 45% of specific industries they sell into are at a standstill.
- 42% saw turnover or layoffs at their customers’ companies.
The economic impact doesn’t stop there. A majority of executives have noted cost management as a top priority over the next 12 months, regardless of whether the company has a positive revenue outlook or not. Over the next year, sellers can expect to see spending cutbacks, budget lockdowns and vendor consolidation as part of the norm. Frugalnomics is in full effect, meaning buyers are more economic-focused and risk averse than ever before.
Whether it’s services or solutions, buyers will be scrutinizing and deprioritizing sales pitches unless a seller can clearly show alignment to strategic initiatives and most importantly how the service or solution will help the company cut costs and “do more with less.” With all of this mind, how can sales teams maintain existing business while fostering growth? Consider value-based or ROI selling.
Value-Based or ROI Selling Explained
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.”
You already know buyers have evolved. Part of their evolution includes doing most of the buying research on their own—meaning, by the time they get to a salesperson, they already have an understanding of what the product or service can do. For sellers, instead of explaining what the product can do, they must shift to how the product or service will benefit the end-user. Having this information included in your presentation will allow buyers to justify the purchase quicker.
The Need for Value-Based or ROI Selling
According to SiriusDecisions, the biggest reason why sales teams experience decreased revenue is not due to lack of training or leads, but the inability for sales and marketing to communicate the value of their solutions to prospects.
With most sales teams shifting to virtual selling during this time, the need for differentiation is even more critical. Sellers who continue to leverage static pitch decks, offering information that can already be found online, will lose deals. Instead, sellers must add value to sales conversations and explain how the product or service will positively impact the company beyond just making employees’ jobs easier. If you’re unable to deliver this information, you leave a value gap—a divide between buyer expectations and a traditional sales and marketing approach.
The more this gap continues to grow, the higher the chances of you losing the sale entirely. If a buyer is unable to justify the purchase, it often leads to them leaving the sale altogether. In fact, 40% of today’s B2B purchase attempts end in “no decision.” Given the current state of the economy, it’s likely that this number will increase. To combat the value gap, sellers must quantify value over pitching products.
How to Ensure Success With a Value-Based or ROI Selling Model
If you’re thinking of making the switch from product pitch to value selling, consider these three key components:
1. Make value-focused sales conversations a priority.
As Mick Jagger once said, old habits die hard. For sellers, shifting focus to value can be difficult after focusing the majority of their attention on product capabilities. Ironically, the best way to get your sellers in a value mindset is by showing them the value of the product just like you would to your buyers. Helping sellers understand the advantage of selling value will allow them to create their own sales talk tracks much easier.
One thing that I’ve found to work is leveraging the CLOSE methodology. This includes five steps, helping sellers gather their value proposition: Challenge, Loss, Opportunity, Solution, Evidence. Through the CLOSE method, sellers and marketers can challenge current thinking, leading to faster sales decisions.
2. Design sales content to be interactive and value-focused.
For value-based or ROI selling to work effectively, marketing and sales teams must work together. Sellers must have content that addresses the buyer, the challenges they’re facing and what inaction is costing them each day to truly be successful.
Keep in mind many companies are considering working remotely even past COVID-19. This shift in selling will require you to make a more conscientious effort to pay attention to the format in which you’re presenting content. For this reason, consider utilizing interactive presentation software or a sales enablement platform, allowing you to quickly pivot your presentation to meet the needs of what your buyer wants to speak to.
3. Interactive value selling tools
Many organizations leverage spreadsheets to help sellers calculate and communicate return on investment or total cost of ownership.Unfortunately, there are many pitfalls to spreadsheets, including lack of adoption, version control issues and maintenance costs.
Instead of relying on spreadsheets, consider incorporating ROI and TCO calculators. By leveraging these tools, both marketing and sales teams can ensure value propositions are clear from the buyer’s first interaction all the way to purchase.
Don’t Miss Out on Value-Based or ROI Selling
With an economic downturn, buyers are more frugal and skeptical. The initial slides you have in your presentation about your company, like when you were founded and what you do, is going to lead to your buyers hitting the snooze button. Instead, focus on how you can solve their unique business challenge and the bottom-line impact you’ll deliver so they can wake up to the value of your product.
Tom Pisello is chief evangelist at Mediafly, where he is responsible for developing new practices for sellers and marketers to communicate and quantify business value to increasingly frugal buyers. He also leads Mediafly’s Advisory Services group in helping companies evolve their selling practices from transactional to value-led, as well as founder of the Evolved Selling Institute.
Author
Get our newsletter and digital focus reports
Stay current on learning and development trends, best practices, research, new products and technologies, case studies and much more.
