I have always been involved with high-end products or services within the B2B market. In my case, high-end typically means either technology leadership or a premium offering over what the market is accustomed to. Without realizing, I had been using the principles of VBS long before I even knew what it is.
I was formally trained on Value Based Sales & Pricing in the 2008/2009 timeframe when I was selling environmental controls to coal-fired power plants in Asia for Alstom. Compared to the local competitors, you really couldn’t get much more high-end than the Alstom offering. Our success was 100% based on identifying intangibles and being able to monetize them – and simply put, that is Value Based Sales.
This training resonated so loudly with me that it has become a major factor in my successes since then (and likely even before).
In its simplest terms it is identifying value drivers and crafting a proposal (or proposition) linking those drivers to your organization’s core strengths. Sounds simple, right? Well, its not – identifying real value drivers requires time and most importantly, trust! The challenge is twofold: 1) more often than not, the customer doesn’t know the root cause of their pain, they are probably looking at a symptom, not the true cause, and 2) purchases are made by people, not businesses – so there may be personal motivations behind a purchase decision that has little to do with the problem.
Getting to the root cause requires the patience to continue asking questions, not taking anything at face-value and a little bit of trust thrown in there. One test you can use to identify if you are at a root cause or symptom is trying to monetize the solution – if that’s extremely difficult to do, you are probably still at the symptoms.
Trust is the key to understanding non-business purchase drivers. No one is going to let you in on that information on a first meeting – simply not going to happen. You have got to invest the time to build up the relationship well enough for the customer to trust you enough to begin sharing this information.
Short answer: improve your close rate, improve margins and increase revenues!
Here’s a real world example of how VBS has been a key factor in my success:
My last corporate position was as the China Country Manager for a US Fortune 500 company. The typical sales process in China goes something like this: