What defines value in business-to-business sales?
Wed 6 July 2016 - 12:03 pmSales | Small Business | Strategy
When you’re selling to businesses or to government, you will find that most deals and contracts of significant size and value are transacted through formal processes like competitive tenders. As a result, you’ll be dealing with the customer’s procurement or purchasing department. Unfortunately, this can seem impersonal and challenging. Yet it doesn’t have to be this way.
Buyers are not mythical, unknowable creatures. They’re human, and they put their pants on one leg at a time, just the way you and I do. In their job role, they’re responsible for getting the best deal for their organisation, just as we are for ours. Problems can arise, however, when our idea of the “best deal” does not match theirs.
Research by Qvidian shows that 63% of sales are lost to “no decision”. Behind these losses is a huge amount of wasted effort and lost opportunity, for buyers as well as for sellers. What’s really going on here, and what can we do about it?
Better understand the value of what you’re selling
Sales lost to ‘no decision’ often stall because doing nothing is often easier for a buyer than doing something that seems difficult or risky.
Although the buyer might give you many reasons as to why they did not proceed, these usually boil down to a single factor – they simply don’t believe the commercial value proposition you presented them with. In other words, they don’t feel that the investment they will make would deliver an adequate return, or that the benefits would outweigh the costs. If you often find yourself in this position, it might come as a relief to know that the solution to this problem isn’t to get better at sales techniques or at negotiation. In fact, the solution is quite simple; it is to better understand the value in what you are selling, and to present this in a way that helps people to understand why they should buy it.
How do buyers assess your value proposition?
While every buyer’s process and criteria will look different on the surface, the underlying fundamentals are the same. Buyers buy with their gut, head and heart. Within each of these drivers, there is a left-brained (quantifiable) and right-brained (qualitative) attribute that defines how they see value.
Firstly, visceral (or gut) value attributes include cost and risk. Author and neuroendocrinologist Dr Deepak Chopra says that gut feelings are “every cell in our body making a decision”. Sellers often try to skip over these attributes, and we do so at our peril. But there is a positive side here too. Buying decisions are often triggered by fear, and we can help our customers to understand and protect against their fears.
Secondly, buyers value logical attributes like productivity and reduced complexity. The head drives logic, and most of us have way too much going on in there to be logical about all of it. This phenomenon is known as cognitive load, and we can play a role in reducing this burden for our customers.
Finally, buyers value aspirational attributes like quality and connectivity. Buyers want to make an impact and create a legacy. Understanding this, we can set our customers on a different – smarter and better – path than they would be able to choose on their own.
A commercial value proposition is like a snowflake
No two are exactly the same, as you are always selling to different people, all with their own hopes, fears and problems to solve. However, understanding how buyers think about value takes the guesswork out of the selling process, and helps you to frame what you do so that buyers appreciate its true value.
About the author
Robyn Haydon is the author of three books on business development: her Winning Business series includes Winning Again (customer retention), The Shredder Test (winning proposals) and Value: how to talk about what you do so people want to buy it. Visit www.robynhaydon.com