Value Selling: The Tail Can’t Wag the Dog


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You’re frustrated. Prices are eroding. It seems that your sales people are routinely outmatched by your customers and competitors. You wouldn’t be the first CEO, General or Product Manager whose first reaction to a low margin or lost deal is:

“We can’t sell value!”

Perhaps you’ve tried to fix the problem by investing in value selling training for your sales force. It’s a perfectly logical move. After all value selling programs promise better customer retention, increased sales, and higher prices.

The Value Selling Prescription

Value selling requires the sales person to quantify the impact of your product on your customer’s business, establish a price based on that impact, and then communicate it in a credible way.

This means that the sales person must:

  1. Engage early in the sales process
  2. Sell at multiple organizational levels
  3. Have business-oriented conversations
  4. Understand the financial impact of your product on the customer

These things are executed according to the value selling process. A process that can be summarized by these three steps:

  1. Identify the prospect’s problem and it’s economic value drivers
  2. Demonstrate that your product addresses the problem and provides the most economic value
  3. Link that value to your price

The value selling process kicks off in step one with discovery. Your objective is to understand as much as possible about the prospect’s business and problems. In this phase, you pay special attention to those problems related to your company’s offering and how those problems affect the prospect’s economics. Multiple levels of the organization need to be worked to get an accurate and complete picture of your prospect’s business.

While in discovery, it’s important that you resist the urge to tell the prospect about your product’s value. You don’t yet know enough to make your pitch. Instead focus on asking the questions that will reveal how your prospect perceives and quantifies value.

You reach the second step once you know enough to show how your product will create value for your prospect. First you demonstrate that your product is relevant to the prospect’s problem. Then you must demonstrate that your product addresses that problem better and provides more economic value than the alternatives in the market.

Finally, that value advantage that you demonstrated in step two must be linked to your price. This is done with a value message that anchors your offer to the financial value that your product creates for the prospect. This firm connection between price and value in turn forms the foundation on which final negotiations will be based.

It’s hard to argue with the value selling prescription. But it’s only one link in the value strategy chain…the last link.

Value Must be Created Before It Can be Sold

The word “product” appears seven times in the value selling prescription above. For value selling to work, a valuable product must exist. That product must have been conceived with a value-based approach.

You have to find a market segment big enough to support your financial objectives with lots of customers who have similar buying behaviors and value drivers. Then you must develop and market a product that hits those customer value drivers better than the alternatives. And you must do this such that your company can make a profit.

The process for doing this is actually very similar to the process for value selling. The difference being that a value-based product strategy executes those steps at the product offering and market segment level.


Value strategy chainA value-based product strategy process turns customer intimacy and detailed understanding of the competition into valuable products. Without valuable products, you will not succeed at value selling.

The tail cannot wag the dog.