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The path to value

Value-added selling is not a flavor-of-the-month sales hook; it must be planted like a seed and nurtured to see sales grow and bloom.

by Paul Markgraff

Primo Industrial Supply sales and marketing manager Kevin Fitzpatrick was at the end of his rope with his sales team. He asked them to sell value instead of price. When his sales team continued to cave in to customer price demands, Fitzpatrick threw up his hands.

Even though Primo Industrial Supply is a fictitious distributor, this problem is very real. Migrating your sales team from a price-based selling strategy to a value-based selling strategy can take time, patience and creative thinking. Distributors who understand the journey say salespeople must understand two facets of value-added selling to be successful. Salespeople need to be knowledgeable about their value-adding products and services, and they need to open a dialogue with customers in order to overcome price objections.

“These steps must be followed or you will not get the buy-in required to get the message to the customer,” says Steven L. Alexander, vice president of sales and marketing for Superion Inc., a manufacturer of industrial cutting tools. “The sales team must become comfortable with the value-added sales approach so it becomes the course of least resistance. This will put you heads above your competition because most of them are selling on price.”

Know your products, services
First of all, salespeople need to understand where value exists in their product and service offering. Fitzpatrick needs to explain to his salespeople what separates Primo’s product offering from other distributors. Salespeople also need to understand why Primo’s service offering differs from the competition and in what ways.

Alexander says it’s important salespeople understand how Primo’s products and services represent value. It’s also important they believe in the value Primo provides and learn how to demonstrate the additional value to a customer.

“Role-playing is an excellent method to practice conveying value to ‘customer’ in a controlled, non-threatening environment,” he says.

Getting salespeople to believe in the value-added approach can be very difficult. Alan Rooks, branch manager for Florida Bearings Inc., a bearings and power transmission distributor, provided a simple method for teaching the value-added approach to salespeople.

“I ask them ‘Why should you be paid more?’” he says. “With this scenario in mind, they begin to see just what value, or lack thereof, they bring to the company and in turn begin to see exactly what value-added selling means. I’ve used this with inside and outside salespeople and have had very good results.”

Post-training
After teaching his salespeople how to perceive value in products and services, Primo’s sales team needs to take its new approach to market. They still will encounter obstacles because many distributors continue to sell based on price demands. It may be difficult to overcome the momentum of price buyers, but it can be done using a methodical approach.

A claim that Primo’s price is too high should be treated as an allegation, and Primo is presumed innocent until proven guilty, according to Dave Riess, president of Herlache Industrial Supply, an abrasives and cutting tool distributor from Green Bay, Wis. Always answer the allegation with the question: compared to what?

“This will open dialogue that should lead to a clear understand of the total value proposition,” says Riess.

Once all the facts are presented, one of three outcomes is possible:

• The price is justified and the buyer reluctantly withdraws his allegation and places the order.
• The price is found to be low for the value offered and the buyer quickly and enthusiastically places the order before the seller catches on.
• The price is indeed high and the seller is in a position to make an educated decision what to do about it.

“This takes more time and is harder to do than just immediately dropping the price, so there needs to be an incentive for the salesperson to make the effort,” Riess says.

Knowledge + relationship = value-added seller
Once a salesperson knows the ins and outs of his products and services, he is halfway toward becoming a value-added seller. Then, when a salesperson feels comfortable explaining to his good customers how valuable Primo’s products and services are, he’s almost all the way there.

The customer will need to make the final leap to trust the salesperson, the products, the services and the documentation that supports the value proposition.

“When pricing becomes an issue, your customer will keep in mind the value of service you are providing; he will understand there is only so much you can do from a price perspective,” says Sandy Taylor, a buyer for Summers Hardware & Supply, an industrial distributor of abrasives, electrical supplies, fasteners, heating and plumbing equipment, and tools. “The product is very important, but the service you provide is priceless.”