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Drive profits in commoditized markets by selling value over price

Cash preservation remains a priority, as leaders keep a wary eye on earnings and cash flow. Deep recession and intense competition have driven prices lower in most supply chains, yet customers demand still deeper discounts. Even as businesses ask their sales organizations to increase prices and gross profits, salespeople seem to be facing a stark choice: discount or die. But there is a third way. Shift the customer conversation beyond price to value.

Salespeople seem to face a stark choice: discount or die. But there is a third way.

It’s a challenge to persuade buyers to recognize and pay for value when they are awash in a sea of lower-priced commoditized options. This is especially true for buyers who default to price as a primary comparison point. Intense scrutiny of revenue and profit margins makes overcoming this challenge critical to business success. Salespeople who cannot sell value erode margins to unsustainable levels and grind their organizations into irrelevance.

Successful organizations provide their sales force with a consistent, structured approach to looking underneath price objections in order to fully understand buyers’ true needs. Taking this approach often requires understanding both the business and personal needs of buyers and influencers. Sales people must:

• Discover and respect customers’ buying processes
• Involve customers in shaping solutions
• Prepare to negotiate across a range of interests rather than price positions; and
• Confirm value throughout the buying process

Salespeople who take this approach often preserve their margins and gain greater access to senior stakeholders. As a result, they can explore more strategic opportunities.