Using the principles of value-added selling, you can actually increase the perceived value of your product and your business.
The most effective definition of value-added selling comes from this Faranda maxim: “Value-added is what you do for your customer that your competition cannot or will not do.”
The basis of this maxim is that you cannot have value-added if your competition is doing, and offering, the same things. You must do what others are not doing in order to add value.
Organizations that focus on selling their added value before selling their products or services are organizations that thrive in both good and bad economies.
Here are the basic principles or growing your business with value-added selling:
Principle No. 1: Value-added can be product related, organization related or personnel related. The belief that only product-related items add value is nonsense. Company policies and procedures add value. People add value. The goal is to ensure you are adding value in all three areas, and in a manner that your customer notices.
Principle No. 2: Value-added selling is a good offensive technique to beat your competition. Value-added selling is PRO-active, not RE-active. Thus, it forces you to “call the plays” that really put pressure on your competition – plays that differentiate you from your competition.
Principle No. 3: Perceived value equals real value in your customers’ minds. Whatever the customer “perceives’ is real to them. What they perceive is what they use to make buying decisions.
An organization with high perceived value and low real value will still do a good business. An organization with high real value and low perceived value will do a poor business. An organization with high real value and high perceived value will do a great business and will steal market share from its competition. Always strive to be an organization with high real value and high perceived value.
Principle No. 4: You do not know what your customers really think about you until you ask them. There are several techniques available to ask your customers how they feel about you.
First, you can train your sales force to ask specific questions of your customers. Second, you can conduct customer surveys to get specific input. Third, you can hold “Focus Groups” to get in-depth customer reactions to your products and services. Lastly, you can have your customer service department gather the information from your customers.
All of these methods work, but all of them suffer from one serious problem – getting accurate and real information. The truth is there are points your customers want to tell you about you that they do not necessarily want you to know came from them. They want to protect themselves from your wrath. They want confidentiality. They want to really tell you the truth…but safely.
To solve this problem, you can use a very effective fifth method. Hire an outside consultant to do telephone or in-person interviews with a selected list of your clients. While this is the most seldom method used, it is often the best. This method protects your customers’ confidentiality and thus provides you more real information about what it is like to do business with your organization. Use this method and you will be amazed at what you find out. You will also be amazed at the value you can add by correcting customer relationship problems.
Principle No. 5: Make certain all of your employees – not just your sales force – can tell your value-added story. Remember, all of your people are part of the marketing and sales function. In a world of tremendous competition you need your entire team telling your story in a manner that is consistently accurate and exciting.
There is an ancient Chinese proverb that says, “If we do not alter our course, we will end up where we are headed.”
Value-added selling is a method of altering your course to provide a pro-active team that meets customer needs, steals market share from the competition, and grows your business profitably. Focus your efforts on value-added and add results to your organization.