Read on to learn how the prospect theory can help you move from product and solution selling to value selling.
In this article:
- How the Shift from Product and Solution Selling to Value Selling Began
- How to Start Selling Value
- How to Visualize the Value of What You’re Selling
- Changing the Conversation to Deliver Value in Selling
- The Economic and Financial Behavior of Humans
- How to Change the Conversation from Selling Solution to Selling Value
- Changing the Business Conversation in Day-To-Day Selling
Moving from a Solution Selling to a Value Selling Approach
Scott Crosley is currently the Senior Director of Global Sales Force Effectiveness at Sherwin-Williams. He manages Sales Force Effectiveness, which is a large program that spans across different divisions and teams.
His job covers best practices, development of sales teams, training modules, and any kind of sales force enablement tools. He works with their global manufacturing teams as well.
Crosley experienced being on both sides of sales enablement, which allowed him to understand the sales process and selling strategies better.
How the Shift from Product and Solution Selling to Value Selling Began
Crosley started by sharing with us why he’s passionate about shifting from product and solution selling to value selling.
First, he wanted his team to move away from straight product selling. In this selling strategy, the conversation goes, “I have this, while the competitor has that” or “Ours has a better price.”
Everyone is applying straight product selling. The question now is, how do you get away from that kind of conversation?
The big turn, then, was to shift to solution-based selling. In this strategy, sales representatives present multiple solutions or a whole package deal.
Crosley realized that what they’re really moving into is value selling. They believe that they bring value, which is common among businesses.
Yet, according to him, this isn’t always the best message. Working with manufacturers, Sherwin-Williams has the ability to create value, whether customers perceive it or not.
What they struggle with is communicating what that value is worth. That’s where they changed their approach to giving their customers not just a solution, but something of value to them.
To achieve this, they started improving their sales team’s business acumen. They also began giving their people value-based selling training to help them become proficient at it.
How to Start Selling Value
A lot of people know about consultative selling or solution selling. The concept of value selling, however, is still not as explored.
As they shift from solution selling to value, Crosley revealed that there are some things they found to be essential. First is gaining a good business acumen.
They want to make sure that their salespeople understand how their customers make money. That way, they can help the customers monetize their assets and pull in revenue.
Another important thing is to know the customer. They expect their salespeople to know which market their customers are in and where they play in that market.
Those are the factors that determine what’s valuable to them.
Crosley’s work involves changing the way the sales conversation goes. That way, after their sellers present the facts, they can influence their customers to make a decision or change.
Your sales team needs to know what your customers consider as valuable. One way to learn this is by looking at how your customers earn.
Then, you need to integrate the solution you offer with how your customer makes money so you can drive value.
It’s not just selling a solution — you also need to see how you can improve your customers’ lives in a practical way.
As Crosley said, you can offer so much practical value. It may not always be easy to visualize, but this is where product and customer knowledge come into play.
How to Visualize the Value of What You’re Selling
The next question is, how can you properly visualize the value of what you’re selling during sales conversations? Crosley said there are several ways of how you can do this.
At Sherwin-Williams, they use calculators and other tools that’ll ensure the value they’re visualizing will work for the customer. This means understanding their customers’ labor rates and how they earn so they can come up with an actual dollar figure.
Crosley’s team focuses on gathering all the relevant information they can use to support the value they offer.
Changing the Conversation to Deliver Value in Selling
Crosley admitted that what he’s especially looking forward to is changing the conversation to deliver value in selling.
They found that with solution selling, and even with value selling, people still don’t change their minds. Salespeople found themselves saying that even though what they offered was 5% cheaper, they still didn’t get the sale.
There wasn’t enough gain in that. The value wasn’t enough for customers to change their minds, even though people always say customers buy based on price.
As a sales manager, Crosley could testify that hundreds of customers made illogical decisions not to gain or save money, which is why he wants to change the conversation.
While studying this concept, Crosley came across the Amos Tversky and Daniel Kahneman’s prospect theory, which is associated with behavioral economics.
Crosley applies it to value selling by creating an understanding within the customer. Sellers focus on what their products are capable of, then expect the products to sell themselves.
He realized that what sales leaders need to do is to develop their people instead. They need to be capable of making their customers understand how much the value they offer is worth.
The Economic and Financial Behavior of Humans
The prospect theory thought process is popular nowadays, and it’s used in advertising and even politics. It talks about how people are risk-averse when it comes to gains and risk-seeking when it comes to loss.
One example Crosley gave was betting on a lottery ticket. The ticket fee of $2 is a very minimal risk, but he doesn’t play that until the jackpot hits a hundred million.
He doesn’t even play it with a million dollars, even though it could change his life. It takes a really big gain for him to take a risk on that gamble.
That’s the kind of attitude you see in customers all the time. You can tell them that you’ll save them 5%, but they don’t necessarily jump on that offer.
Why? It’s because people are more likely to avoid loss than to seek gain.
How to Change the Conversation from Selling Solution to Selling Value
Crosley said that to change the conversation, you have to reach the salespeople and the sales management level. Then, you need to change your sales thought process, presentation, and style.
One of the keys is to create a true gain, and not something that’s only smoke and mirrors. Then, work with your sales team to literally change the conversation.
For instance, let’s say your sales spiel goes like this: “I’ve got a solution for you that saves you 10%.” Change it up and frame it as: “We’ve evaluated your operations and we believe you’re spending 10% more than you should.”
Now you’re asking the customer to take a chance, a risk. You’re also pointing out to the customer that they’re on the losing side of the deal.
Regardless if you show up or not, they’re still losing 10% more than they should be.
If you communicate this right, your customer will ask, “How do we fix that?”
Now, this brings you to the customer’s side of the conversation. You’re also getting them to move away from spending too much instead of reducing their spending.
Changing the Business Conversation in Day-To-Day Selling
In Sherwin-Williams, they started applying this change in business conversation on their B2B front phase. Crosley admitted that they’re still refining their tools.
The good thing is, they’re seeing an uptake with some of their deals as they push this type of language forward. They’ve also gotten good at monetizing the value they offer with some of their larger customers.
Crosley advised companies to spend time developing their salespeople. Training is the easy part — the real challenge is with mass communication and practice.
Sales managers ought to learn these types of conversations and they should use it as part of their proposal steps. Then, they can pass on the knowledge to the sales reps and involve them in the process.
While there are documents and calculators involved in this process, what’s really important is developing sales’ reps soft skills so they can communicate the value.
Customers don’t make a true utility choice. That’s why sales professionals need to find a way to help them make the right decisions.
Moving from solution selling to value selling won’t be as successful if you don’t nail communication and practice. Changing the business conversation is important so you can help your customers make the right choices.
Instead of focusing on the usual product selling, strive to make your customers understand the worth of the value you’re offering.
How is your current selling strategy helping or derailing your business? Share your experiences with us in the comments section below.