Choosing the Right VBS Approach in Four Easy Steps

October 22, 2021

4 Easy Steps to Values-Based Sales

As discussed, there are Three Ways to Sell Value. This is called Value Based Sales, or VBS. But which approach should you take? To answer this, you need to do some research.

Step 1 – Identify Your Unique Strengths

First, determine what sets you apart. For example:

• Do your processes give you quicker turnaround?
• Are you minimizing your scrap?
• Are you excelling at cross-company communication?
• Are your products that much better or easier to customize?

Determine what added value you can better apply to your offers and where you can improve in a way that adds further value. Once you know this, you know the best place to start offering the value to your prospects.

Step 2 – Find Your Clients’ Needs

Next, determine your prospective clients’ weak points. For example:

• Are they low on capital but high on expenses?
• Does it seem like their market has untapped potential?
• Are their operations creating DOWNTIME?

In this, each VBS approach has different benefits for your clients:

• Your better products help cut customer costs with less scrap and less returns
• Your better processes, and implementing them, help improve productivity
• Your better guaranteed outcomes help free up capital

Knowing what they need helps you know what approach to use to sell your strengths in a way that is mutually beneficial.

Step 3 – Teaching as a Pitch

Your team is there to instruct and inform. This change to current processes can create conflict. This means that you can expect there to be people that resist your changes. When this happens, remember: Understand their side, communicate your understanding, and negotiate a better resolution.

These conflicts arise with different groups, based on your approach.

Product VBS

This approach can be met with resistance from your sales team as they adjust. Your team will still use their expertise in your industry as their core, but they will need to shift their focus from product features to measurable benefits. This gains appeal at higher levels in the customer organization.

To ensure your success your team will need training, value calculators, and new incentive schemes.

Customer Process VBS

Most resistance in the customer process VBS comes from the customer teams. Here, your teams need to have deeper understanding of the clients’ target industry along with process management, consulting, and some conflict resolution skills so they can work with the customer to improve production areas as they see them.

To ensure your success your team will need core members that have a better understanding of the customer goals and processes along with an understanding of their industry.

Performance VBS

This approach can be met with resistance from all related teams. Your teams need to have open communication with your customer and be ready to have customer representatives as agents on your shop floor and vice-versa. This blurring of customer and supplier requires added management oversight as staff adjust to their new roles.

To ensure your success your teams may need new organizational structures that decrease team silos and ease cross-team communication along with clearly stipulated client and supplier responsibilities, value sharing, and incentive schemes.

Step 4 – Less is More

Not everyone is ready or willing to buy that higher sticker price that comes with VBS. Even when it means better returns in the long run. Because of this, and the cost to implement VBS, it is important to know your customer base and what they are willing to accept.

For your clients to buy your value, they need to have a better understanding of the total cost of ownership and the long-term effects of the added cost. They should also understand the risks that come with that value.

Your VBS customers also need to have enough buying power to support the changes that may be required to buy your value, especially for customer process and performance approaches.

You need to understand your clients well enough to know which ones are a good fit for your VBS approach. The size of your offer and the access you have to clever decision-makers should impact your sales approach.

Conclusion

When approaching a customer for VBS:

• Teach value – Teach your clients about the value that you bring to the table and how it improves their operations. For example, share online content that highlights the value and the total cost of ownership differences that you provide over your competition.
• Start small – This helps you open the doors to greater VBS approaches that net better profits for you and your client. For example, start with customizing a product in a way that cuts costs for your client that more than make-up for your higher price.
• Be open – While smaller companies might have a tighter budget, they may be a better choice for VBS over larger firms. For example, a firm may be more willing to commit if the upfront costs are low but future payments are tied to value-based benefits.

References

Joona Keränen, Harri Terho, and Antti Saurama, (September 01, 2021) Three Ways to Sell Value in B2B Markets

Value Selling: The Ultimate Guide To Value-Based & Value-Added Selling

Alfred, Lestraundra (Nov 12, 2019) 7 Key Principles of Value-Based Selling