As an entrepreneur, you’ve likely wondered about the best way to approach the sales process. Your natural inclination may be to think about the “sales funnel”, “developing prospects”, and other industry jargon. These are all valid approaches, but there is a vital step so many companies skip over in their sales strategy: develop a competitive position and demonstrate the value you can offer and win on. If you know what value drivers your customers care about and can deliver on, you’re already halfway to a signed contract.
Think Beyond The Funnel
The problem most sales teams face is a lack of perspective. Many sales managers like to talk about the sales funnel and treat the sales process like a conveyor belt. If you want to be an average sales team, that strategy is fine. If you want to exceed your targets and make an impact, you need a more nuanced approach. Think hard about what it is that you’re offering customers. What makes it valuable and unique? What kind of customer would assign the most value to those attributes? Most importantly, how will you deliver on that value proposition and create a repeat customer?
I recently received a sales pitch for a timeshare. The agent did everything right, telling me that I was “specially selected” for the opportunity before talking about the “free” benefits I would receive, such as free flights and free nights at the vacation property. Then the agent pivoted, stating that I could get all of these benefits if I attended the property’s presentation. All I had to do was provide my credit card information to secure my spot for this package “valued” at over $2,000. Despite my best efforts, I could not get her to commit to telling me the actual price of the timeshare. The best salespeople are pricing experts and save that discussion for the very end of the sales process. Everything up to that point is communicating and defending the value of the offer.
Build A Foundation For Your Value Proposition
Understanding your value proposition is great, but only if you can clearly and concisely communicate that value to the customer. You need to go a step further and understand how that value relates to the benefits created. Is this product or service going to reduce the customer’s workload or increase efficiency? Is it going to enable the customer to be more competitive and help to achieve new goals? Once you understand how the customer perceives your value proposition, you can influence customer behavior. You’re not selling a product or a service; you’re selling a benefit; a solution to a problem. In order to identify that problem, you need to know your customer.
Know Your Customer
Clearly defining who your product is meant to serve is difficult, particularly if your product or market is still in the early development stage. Customer discovery is an iterative process as you begin to develop a clearer understanding of your value proposition. You may be forced to pivot several times before you land on a long-term strategy, and your target customer base might shift over time. Once you do have a minimum viable product (MVP) and a target market, it’s time to understand the customers that inhabit that space. Understand what challenges that industry is facing and how your product can best empower customers. Be rigorous and use data to support your analysis. If you can do that, you are far better prepared to have the discussion with your customer – in-person or digitally – and turn an initial conversation into a sale.
The best sales strategies are customer-centric. A great – not good – salesperson doesn’t sell a product, they sell a solution, and solutions are customized to the end user. Your product may have a variety of features or values but each customer will have different needs. Figure out which product features resonate most with your customer and how they might be valued. Once you answer that question, you’re better positioned to quantify value and start assigning dollar figures to the solution you’re providing.
Don’t Compete On Price
Here’s the catch. Don’t compete on price – at least not directly. A customer-centric sales approach moves away from the “follow the leader” approach that many entrepreneurs adopt when thinking about pricing during the sales process. But in order to build this working position, you must know your pricing strategy to effectively execute this in your sales process. Not knowing how and why your prices are what they are, will make it extremely difficult to clearly communicate the benefits that defend the product’s value and pricing.
What if you’re selling a commoditized product, like bananas or water? Here too there are still ways to differentiate beyond a lower price – if you know your target customers. For every generic own brand bottle of water, there is Evian and Voss. A commoditized product, but differentiated for the customer they’re looking to win.
Ask any highly successful sales professional; once you compete on price, it’s difficult to get the customer to listen to any other part of your value proposition. Start off by fighting to urge to do what the competition is doing and develop a competitive position to defend the price you offer, rather than race your competition to the bottom.
Address The Knowledge Gap
Depending on the complexity of your product and the customers you serve, you may need to bridge the knowledge gap. Take cybersecurity software for example; a potential customer may have network vulnerabilities but not realize the value of your antivirus software; in short, prospective customers don’t know what they don’t know.
There are a number of ways to leverage content marketing and communications programs to bridge that gap. Publish a white paper, speak at a conference, become a “thought leader”. These strategies allow you to build credibility and market your solutions and influence customer behavior without a hard sell. This is an intentional strategy that requires investment but can have huge rewards.
For entrepreneurs, being able to sell is critical to success. Too often the urgency to get prospective customers on the sales conveyor belt misses vital components. This takes away from sales effectiveness and the sales growth your company needs.
The more your decisions are based on what you know – not on a gut feeling or guess – the more effective and purposeful you can be. Make sure you understand the value of what you’re selling – both from the company’s perspective and the customer’s perspective – and the solution it creates for each customer. If your customer understands what you’re selling as well as you do, you’ve already started the defense of your price.
Found this article helpful?
Sharing is caring. Share this on social – super easy 1-click share buttons on the 👈 left side of this page – or send this article to a colleague or friend who can learn something new to empower their company or hustle.
If you or your team is interested in having a hosted session on your pricing strategy and monetization model, please contact us: firstname.lastname@example.org