Sales Blog with Sales Tips

There is an avalanche of misunderstanding and disagreement when it comes to value propositions.

Since there is no absolute definition of value propositions, let me give you a brief history. I’ll let you come to your own conclusions as to what they really are and how you might use them in your selling efforts.

In The Beginning…Phase 1
It all started with salespeople doing nothing more than selling the features of their products. This kind of selling started before the industrial revolution and sounded something like, “Ivory soap is 99.44% pure.” Nothing more than a simple feature.

Things Evolve…Phase 2
Around the 1930’s, the advertising and selling world realized that prospects needed more than a feature. They needed a reason to buy. The benefit was born. Tell the prospect about a feature and then tell them why it helps them.

Significantly driven by automotive advertising, we saw feature-benefit statements like, “General Motors’ new Hydra-Matic transmission completely removes the work of shifting and operating a clutch.”

Circa 1970’s…Phase 3
The first hint of sophistication in features and benefits enters here. The marketing types realized (as we know today) that prospects couldn’t care less about the feature; they were interested in the advantage to them (i.e. the benefit).

The marketers fixed this by simply reversing the feature-benefit statement to a benefit-feature statement. Tell them the benefit first and then tell them how it is achieved.

“Give your children more of your time by using Duncan Hines’ 1-2-3 easy cake mix.”

The Birth Of Value Propositions…Phase 4
Transport yourself to the 1980’s.

It is arguable who actually “invented” value propositions. There is also little agreement as to what ingredients should be in a value proposition and in what order they should appear.

However, most value propositions include the following four basic components and normally in this order (but not always): need, feature, benefit, uniqueness/differentiation.

“Busy executives need to be able to work in comfort when traveling. American Airlines’ business class provides you the ability to conduct business in a luxurious environment. No other airline offers as many business class seats as American.”

One More…Phase 5
Sales and marketing is currently operating, for the most part, under phase 4. But there is a new wind blowing. Primarily driven by the Gen Y’ers.

This wind is called the New Authenticity. It throws out all of the above and simply asks the sales professional to be revealing, honest and direct with the prospect. No formulas. No games. No marketing (at least not overt).

Kind of refreshing sounding isn’t it?

Sales Tips Wrap Up
You’ve been through all of your company’s sales training and you’ve heard the marketers at your company tell you their story. Your sales manager uses “value proposition” or “value added selling” in every third sentence.

However, the most successful sales professionals have used the new authenticity approach for their entire sales career. They just didn’t know what to call it.

This new authenticity thing has legs.

Further sales tips reading:
Selling In A Recession, The New Authenticity
For A Change, Try Being Honest With Your Customers

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>©2010 Scott R. Sheaffer

Scott Sheaffer’s New Book, “Comatose Management”
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I’m sick of hearing about “added value.” So are customers. We have to start giving our customers and prospects something real instead of spouting off intangible and meaningless phrases we’ve gotten from marketing.

Believe me, much of the “added value” we spew on our customers lands on deaf ears.

Voodoo Added Value
Voodoo Added Value is my term for the embellished, intangible and baseless added value we hurl at customers. Want some examples?

“We have the best trained account managers.” Name one of your competitors that doesn’t claim the same thing.

“We can provide any product or service for you, even if it’s not in our product line.” Really? Can you? Think the customer believes that? Does your employer believe that?

“We are an honest company.” Oh please! Companies aren’t honest, people are.

“We’re the Mercedes of the business.” Again, name one of your competitors that you think might say something like, “Oh yes, we’re not that great at what we do, but we have great looking account managers.”

“We provide the fastest service/product delivery/response times/etc.” Quick, how many of your competitors say this? Answer: all of them.

The Great Contradiction
Given that your competitors are repeating these same kinds of Voodoo Added Values, actually not saying them becomes a real added value. This is counterintuitive.

Think about it.  Authenticity, credibility, factuality, legitimacy and originality are valued by customers. They respond positively to these qualities. No hollow marketing chatter required.

Sales Blog Epilogue
Rules to sell by – and to avoid the trap of Voodoo Added Value:

• Anytime you feel it necessary to start machine-gunning your customers with added value statements, ask yourself, “Is this the least bit original or has this customer heard this from all of my competitors?” If it fails this test, it’s Voodoo Added Value. Your customer isn’t listening.
• Am I making legitimate and factual claims as to the added benefits my company brings to the table? If the answer is no – Voodoo Added Value.
• If what you’re saying is not credible, or if you don’t sound credible, you guessed it, Voodoo Added Value.
• Am I being authentic or am I being a phony? Don’t forget that buying from you is not your customers’ first rodeo. They can sniff out an imposter in about three nanoseconds.

Further reading:
What Value Do We Need To Be Selling In A Recession?
Rise Above Commodity Style Selling

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>©2009 Scott R. Sheaffer

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I’ve had too much caffeine today. I’m feeling very passionate about today’s sales blog.

No one wants to be viewed as a commodity salesperson. Customers are extremely price sensitive when it comes to commodity items because they view these as easily sourced and indistinguishable from your competitors.

I know what you’re thinking. You’re thinking I’m talking about products such as corn, gold and lug nuts. But you’d be wrong. Yes, I am talking about corn, gold and lug nuts, but I’m also talking about complex services as well. Everything can be turned into a commodity sale if we let it.

I’m saddened when I see a sales professional who can take selling medical consulting services to orthopedic surgeons and mutate it into nothing more than a commodity sale.

I’m constantly amazed – and impressed – how a friend of mine has been able to take selling roofing materials way beyond a commodity sale. His success speaks for itself. In fact, I can guarantee he is offended that I would even call these kinds of products a commodity. He has the kind of attitude I’m looking for.

Sales Tips For Rising Above Commodity Status
1. If you view what you sell as a commodity, it will also be seen as a commodity in the mind of the customer or prospect – and treated accordingly.

2. Nothing has to be sold as a commodity.

3. The personal value you bring to the selling process is why you never have to sell a commodity again the rest of your career. I don’t care whether you’re selling jet airplanes, wheat or nuclear power plants; products from different suppliers start to blur in the eyes of the buyer. You provide the differentiation. Stop believing your company’s marketing collateral. Your company simply isn’t that different from your competition, but you are.

4. Asking customers nothing more than closed ended questions is one of the best ways I know to ensure they view you, and what you sell, as a commodity. This is a big problem in professional sales today. This is an anecdotal survey, but out of every 10 sales professionals I ask to demonstrate an open-ended question, only one or two can do so.

5. Walking into a prospect with no preparation makes you look like a door-to-door magazine salesperson. You have to know something about the prospect in order to engage them and go beyond merely talking about the products or services you sell.

6. “Puking all over the prospect.” This is not a very appealing visual is it? However, it’s what we do when we meet a prospect and give them a 30-minute presentation on the history of our company and why we are the biggest, greatest, strongest, etc. They don’t care at all about our company. They care about how we can help them and what we know about them.

7. Not listening.

8. I’m all about being assertive with customers, but I’m not into aggressiveness. The ABC (Always Be Closing) sales concept sounds cutesy, but in practice, it’s a train wreck. Your customer will put up his or her defenses when you’re aggressive. This makes you look like a generic commodity salesperson. When you’re truly tuned into your customer, you don’t have to ABC.

The Payoff
At the end of the day, selling your products and services as commodities is absolutely boring and your customers will beat you down on price.

Focusing on your customer – and not your product, service and pricing – will allow you to sell yourself and what you can do for the customer. This makes your job more interesting, enhances your relationship with the customer and, most importantly, allows you to charge a price that is fair to you, the customer and your company.

Further reading:

• Rise Above Commodity Style Selling
• A Great Selling Tip when Selling Commodities
• The Incredible Importance of Open Ended Questions
• There’s A Type Of Questions That’s Neither Closed Nor Open
• This one important sales skill is a lot like a kiss

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>©2009 Scott R. Sheaffer

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There is a universal buyer behavior shift that quietly started about 1997. It is a change that is profound, permanent and growing. It has already affected every sales professional reading this sales tips blog. One of the least endearing characteristics of this transformation is how it is concealing itself inside our current economic circumstances, while its effects become increasingly far reaching.

I call it Buyer 2.0™.

Malcolm Gladwell, author of The Tipping Point writes that “The best way to understand the dramatic…changes [we see in business]…is to think of them as epidemics. [Seemingly insignificant] ideas, products, messages and behaviors spread just like viruses do.”

The Foundation For Buyer 2.0™
Let’s review some buying trends over the last few years that don’t appear to be abating whatsoever in consumer or business sales.

Walmart’s continued strong growth is one of the biggest indicators. It is the largest corporation in the US and by far the largest discount retail store. It has achieved this status not through any kind of traditional value selling; they’ve done it through pricing. There is no “buying experience” or added value at Walmart.

The proliferation of “big box” stores like Sam’s and Costco has taken the Walmart concept and put it on steroids. You go, you buy bigger quantities than you need, you pay cheap prices and you leave. You’ll have to carry your stuff out in your hands (literally) if they run out of trash boxes to give you to carry your purchases. These stores are everywhere.

The “cattle call” airlines like Southwest only offer low prices, a bag of peanuts and a destination.  Their load factors and profitability are better than the more conventional airlines.  They offer a bus ride with wings that cheaply gets you from A to B.

Shopping.com and Amazon.com have made shopping for price almost stupidly easy. These websites do all the work of finding the cheapest price and their traffic is growing rapidly.

Car companies are increasingly moving away from the $30,000+ car segment and focusing on the less than $20,000 car buyer. These cars were being designed before the current recession. How do we know that? Some of these inexpensive cars will be available within the next 12 months; car companies take at least 3 to 4 years to design and build a car. Automobile manufacturers have to be hyper sensitive to buyer trends – obviously some do a better job than others do.  Simply stated, some car manufacturers are already aware of Buyer 2.0™.

Ski resorts are starting to charge skiers according to the condition of the snow. Good snow – higher price. Bad snow – lower price. Skiers are more interested in the price of the skiing, not how cozy the ski lodge is.

There are sports venues that adjust ticket prices according to the standing of the visiting team and importance of the game. Playoff game – higher price. Preseason game – lower price.

Buyer 2.0™
As sales professionals we have historically viewed price objections as the most commonly stated objection. While this is the objection we hear most frequently, we also know that research indicates it actually falls to number 5 behind availability, risks, service and quality on the list of the buyer’s real decision criteria.

However, are we seeing a significant renumbering of these criteria that pre-dates the recession? Is price no longer number 5 and covertly moving up in the rankings? My answer to both questions is yes.  This is the essence of Buyer 2.0™.

We’ve Been In Denial
There’s nothing new here; it was inevitable. The Internet has taken all of the sales professional’s pricing secrets out of the closet. Burglars like to operate at night because they’re more effective when undetected. Our current recession provides a perfect cover for this swiftly building trend, which started over 10 years ago. It was around 1997 that the general population was becoming familiar with the wealth of pricing information available on the Internet. This was the genesis of Buyer 2.0™.

Sales Tips For Responding To Buyer 2.0™
The first thing we must do is understand that this is a change or evolution in sales, not the commoditization of all products and services. Sales has changed dramatically in the last half century. This is but one more of those changes. We are not all destined to become unemployed salespersons or lose our jobs to e-commerce websites.

However, to continue forward as if nothing is changing would represent a dismissal of reality. Companies and sales professionals can adapt and thrive by recognizing the following:

Companies will be required to get very serious about controlling costs and increasing efficiencies. In other words, provide the same product/service but at a very competitive price, much like our global competitors are already doing.

Sales professionals will legitimately need to understand and demonstrate ROI (Return on Investment) and TCO (Total Cost of Ownership). Buyers are increasingly demanding performance metrics from vendors.

Differentiation of your products and services in the market will become more important and heavily supported by marketing.

Marketing departments will play an increasingly important role as the town criers of value and price competitiveness. They can no longer merely print nice and colorful product/service collateral materials.

Bundling, kitting and packaging of products and services will be a way to recover lost margins in a discounted pricing environment.

Purchases will be pushed down to lower-level decision makers. Sales professionals will have to more effectively deal with purchasing departments since Buyer 2.0™ will mean a swing back that direction. This is a change that is already being seen in many companies.

Contractual purchasing agreements will become more common, even for smaller customers.

Selling service can be a safe haven in many selling situations. I’ve always felt that no 2 companies offer the same service. This makes it difficult, if not impossible, for customers to shop price when it comes to service.

Sales Tips Wrap Up
It was unavoidable. The Internet has put the seller in a more difficult position when it comes to pricing. The recession has made it seem that this is a recent phenomenon, but it is only hastening a pre-existing trend.

Further reading:

• Attention sales representatives, the Internet is not replacing you
• Has Price Quoting Made You A One-Trick Pony?
• Collateral Material, Sales Brochures, What a waste!
• Kits, Assortments, Bundles and Packages as Selling Tools
• Service Providers – Don’t be so Quick to Discount

>You can automatically receive Sales Tips Blog by Scott R. Sheaffer >by email< or >by RSS<.
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>©2009 Scott R. Sheaffer

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Are you satisfied with your sales results?
Kay Ray can show you and your team how to reach
your objectives and unlock the door to success.
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