Value-Based Selling is a sales strategy that highlights the unique value and benefits a product or service can provide to the customer rather than emphasizing its features or price.
The core idea is to demonstrate how the offering can solve customers’ problems, meet their needs, and deliver measurable benefits.
This approach requires a deep understanding of the customer’s business, challenges, and goals, allowing the seller to tailor their pitch to show the maximum potential value.1
Purpose
The purpose of value-based selling is to focus on the benefits and value a product or service provides to the customer.
This approach helps build stronger relationships by understanding and meeting customer needs.
It differentiates your product from competitors, increases customer satisfaction, and leads to better sales by aligning with what the customer values most.2
Usage
Value-based selling is used when the customer’s needs are complex, and solutions require customization.
It is particularly effective in B2B sales or high-value B2C transactions where the decision-making process is intricate and driven by logical and emotional factors.
This approach is also ideal for industries where products or services significantly impact the customer’s business operations or life quality.3
Benefits
- Higher Conversion Rates: Demonstrating clear value and return on investment (ROI) increases the likelihood of closing deals.
- Increased Customer Satisfaction: Customers are happier and more loyal when they see real benefits and improvements from their purchase.
- Stronger Relationships: A customer-focused approach builds trust and fosters long-term relationships.
- Differentiation: Focusing on value sets your offerings apart from competitors who rely on features or price alone.
- Better Margins: Customers are willing to pay more for solutions that deliver significant value, allowing for higher pricing.4
Example
Imagine a company selling advanced CRM software.
Using value-based selling, their sales rep first understands the specific challenges a potential client faces, such as the need for better customer data management or sales tracking.
The rep then demonstrates how their CRM software can streamline these processes, improve sales team efficiency, and ultimately increase the client’s revenue.
The focus is not on the software’s technical features but on how it will add value to the client’s business operations and outcomes.
Related Terms
References:
1. Collier, J. (2023, August 8). Value-based selling: What it is, how to use it. ActiveCampaign. https://www.activecampaign.com/blog/value-based-selling
2. Kienzler, M., Kindström, D., & Brashear-Alejandro, T. (2019). Value-based selling: a multi-component exploration. Journal of Business & Industrial Marketing, 34(2), 360-373. https://www.emerald.com/insight/content/doi/10.1108/JBIM-02-2017-0037/full/html
3. Töytäri, P., Brashear Alejandro, T., Parvinen, P., Ollila, I., & Rosendahl, N. (2011). Bridging the theory to application gap in value‐based selling. Journal of Business & Industrial Marketing, 26(7), 493-502. https://www.emerald.com/insight/content/doi/10.1108/08858621111162299/full/html
4. Kelwig, D., & Writer, C. (2023, January 4). Value Selling Framework & Methodology for 2023. Zendesk. https://www.zendesk.com/blog/value-selling/