Why Do Salespeople Lead With Price?…They Lack a Strong Current Value Proposition
By Mark Allen Roberts
A common frustration I hear among senior leadership teams is; Why do my salespeople lead with price? In my last post I shared one is reason your salespeople may be “selling naked”. In this post I will share why you must create a value proposition that instantly connects with buyers and drives the maximum sales and profit increases.
To get started we need to answer a question;
What is a Value Proposition?
Simply put it is your promise of value you propose to deliver your buyers, and the buyer’s belief of how that value will be experienced by them.
Kaplan and Norton (the authors of the balanced scorecard) put it this way;
“Strategy is based on a differentiated customer value proposition. Satisfying customers is a source of sustainable value creation”
How do we create value propositions that connect with your buyers today?
When creating a value proposition you must conduct win loss market analysis and identify why buyers buy from you and why they don’t. You must clearly understand, through doing the market work, your buyers and prospective buyer’s problems and pains today. You must clearly understand the problems they have, the criteria they look for to solve them and the buying process they are using today and create distinction.
At the end of the day, the two main core attributes buyers use to determine value and differentiate your product or service from that of your completion is: Price and Quality. If your product and company can produce a higher quality overall buying experience, and solve buyer problems completely you can command a higher price. Unfortunately this Gain /Pain teeter totter also swings the other direction as well. If your products or services lack a value proposition that resonates with buyers in your market(s) today, your salespeople can only lead with price.
Let me ask you;
Have you equipped your salespeople with current value propositions that shares how you serve your buyers today?
The most common problem I see when asked to help companies increase sales and profits quickly are they lack a current value proposition that connects with buyers. I have served many companies that make quality products and once clearly understood their markets, buyers and the value they provided was so strong buyers were often willing to pay a premium for their service. Then something changed…it could be a new technology emerged in your market, your competitors improved, your company stumbled in delivering what you promise, and sales stalled and profit margins started to decline. What I have seen are the buyer’s journey and the criteria buyers using to make purchasing decisions have changed but your team failed to identify and adjust to these strategic shifts. The result is your salespeople sound like they are playing Marko Polo on sales calls, calling out possible problems they think they can solve for your buyers just waiting for the buyer to yell: “BINGO now I understand the problem you can solve for me!”When your salespeople have enough of these types of sales calls they resort to the quickest method in their minds to sell: lead with price…and that’s where the sales and profits death spiral begins.
Have I convinced you spending time you’re your value proposition is worth your team’s effort?
If so below are some excellent articles on Value Propositions:
4 steps to creating a value proposition http://www.forbes.com/sites/michaelskok/2013/06/14/4-steps-to-building-a-compelling-value-proposition/
Value Proposition Kit http://www.jillkonrath.com/value-proposition-kit
How to write a value proposition http://www.kinesisinc.com/branding/how-to-write-a-powerful-value-proposition/
Creating a value proposition http://www.mindtools.com/CommSkll/ValueProposition.htm
The Customer Value proposition http://www.appliedproductmarketing.com/resources/CustomerValuePropositionEssentials_eBook.pdf
Three rules to building a value proposition … http://www.raintoday.com/blog/3-rules-to-building-a-value-proposition-that-sells-like-crazy/
The Value proposition canvas http://www.raintoday.com/blog/3-rules-to-building-a-value-proposition-that-sells-like-crazy/
How to create a strong B2B value proposition http://www.slideshare.net/DanielNilsson4/how-to-create-a-strong-value-proposition-for-b2b
A couple more questions and I will let you go….
Do you have a Value Proposition that resonates with buyers in your markets today?
If so are your salespeople trained to use it?
Are you frustrated and feel like you are in a sales and profits death spiral?
Are you tired of explaining to your owners, investors, and your board why sales have stalled and profits are declining?
If so, creating a value proposition is critical to driving explosive sales and profit growth for your organization. If you lack a value proposition that resonates with your buyers today that Gain /Pain teeter totter will shift and you will experience poor financial results. Take the time to do the market work and understand your markets problems and how they solve them today and you will be on your way to creating a strong value proposition.
