Probably the most popular form of selling products and services is “Value-based” selling. When most people are trying to sell something, they will usually start off by telling their potential buyer how wonderful their product or service is. That is the essence of value-based selling.
Like most sales techniques, however, there is a method to it. Since it comes naturally to most people to try to sell something by talking about how great it is, they often overlook the technology behind it. The biggest drawback to value-based selling is that if you do not do it properly, your customers will often spend little time listening to what you are telling them and more time waiting for the “catch”. Fortunately, there is a way to combat that.
Service is a little easier than product sales in that regard, because the potential customer already knows that your service does not come for free. Whether you are a plumber or an electrician making a service call to a residence, or a mechanic who had a car brought to you to diagnose – the prospect knows that if they hire you, there is money involved. The question at that point is how much you are going to charge and for what specific service.
You want the customer to listen to your pitch. You don’t want them to be so far in their head about money that they can’t hear all the good stuff you are going to tell them. I found it very useful to get that part out of the way immediately. The trick is to do it without giving them any kind of price that they could object to. Once they told me about the problem they were having, I simply told them, “Not a problem. Let’s take a look at it and see what it’s going to take to make that right for you. Then we can discuss your options and see what’s going to work for you. Don’t worry, looking is free. I won’t do anything that is going to cost you a penny without your permission, okay?”
First of all, my customer is not worried about the “clock” running or me giving her a bill for looking or anything like that. That person knows that they are not paying anything until THEY decide they want to. That gives them a feeling of control and allows them to relax a little and listen to my suggestions. I also mentioned options. Whenever possible, you should always offer options. I will talk more about that in a later article, but for now, trust me on that one.
Notice also that I ended the statement with a question. More importantly, it was a question to which the only real answer is “yes”. Yes is a very powerful word. You should ask a lot of questions to which the only answer is yes. Even statements should be followed often by questions; do you know what I mean? The prospect should always get used to saying the word “yes” to you. Avoid asking them “no” questions at all costs.
Okay, so you’ve presented yourself to the client, they have informed you of their need (as they understand it) and you have put them a bit at ease. Now they are in a great spot for you to push value. Actually, if you have been doing every thing right, you have already been pushing value. Remember the last article on the Sales Triad? If you followed that principle, you have been showing them respect. They likely noticed that and appreciated it. That begins to build value. Remember that you are clean? More value. The fact that you set their mind at ease, like in the example above, adds more value. You are already beginning to give them the reasons why they should listen to you and follow your advice, before you even began talking about the service.
The goal of value based selling is to get your client to agree to buy before they even know the price. Write that one down and keep it in your wallet. It sounds nearly impossible, and in some cases it is – but not as often as you would think. Whether or not you can get your client to the point where he is willing to sign a contract, without even knowing the cost of doing so, is not as important as you doing everything you can to try to get him/her there. Now, common sense dictates that you do not flat out refuse to give a price until they will sign your contract, but that doesn’t mean that you just give the price when asked, either. The rule of thumb is that if they are asking “how much?” they are not yet ready to hear the answer.
Okay, let me back up a bit and explain how we show value. The first way is by using the “Sales Triad” to build respect and trust. The next thing we do is one of the most important things we can do as sales people – we listen. Let me rephrase that: WE LISTEN! The single greatest contributing factor to successful sales is listening. It is what separates decent salesmen from superb salesmen. You need to know what is important to the customer. You need to pay attention to the clues that you see and in what they say. Let’s look at an example:
I go to Mrs. Smith’s home in response to her requesting service for leaking pipes under her sink. After the introductions and reassuring her that the estimate is free, she leads me to the kitchen where I find that the waste pipes under the sink are leaking all over the place. I also notice that the disposer is old and showing signs of rust. My next step should be to ask general questions and listen closely to the answers. I want to know what’s important to her.
Most plumbers would look at it and tell her, “Well, Mrs. Smith, it looks like all of the pipes under the sink are shot and the disposer is looking like it’s about to leak as well.” Mrs. Smith would let them know that she never uses the disposer, and asks why it would leak if she never uses it. The tech replies that these things just kind of happen. Sorry, but it need to be replaced. That’ll be $650 for all of it. The best case scenario for the tech there is that she says okay (because she doesn’t really know any better) but she feels a bad taste in her mouth. More likely, she will thank him for the estimate and send him away because she needs to “Talk to her husband”.
How would I recommend approaching this situation? Well, first of all, she doesn’t care about the disposer until you say “about to leak”. Then she’ll fix it because she thinks she has no other option. Hopefully, she turned the other guy away and called me afterward, because I will ask enough questions to know details of the encounter. Then I will ask her, “but if you don’t use the disposer, why was he trying to get you to replace it?” She would answer that it needed to be done because it was starting to leak, to which I would respond, “You don’t need to replace it to keep it from leaking. I’ll just remove it for you and put a regular sink drain in its place. That will allow me to replace the drain lines under the sink to make them flow better and be virtually leak proof, as well as open up more space under the sink so your cleaning supplies won’t feel so cramped AND save you $100 in the process.” Is there any way in the world that that customer does not fully belong to me at that point? Don’t worry about the $100 less. I’ll tell you later why that doesn’t matter.
You always want to get as much information from the customer as you can. Everything they tell you and show you will be used against them. If they care about warranty, you stress warranty. If it’s price, you let them know how they will be saving money. Whatever it is that is important to them is what you focus on. That is the part that people most often forget. It is also the part that will make sure that you are successful.
I think I am going to stop this here for now and pick it up with a part 2 in the next few days. There is still quite a bit to cover about value-based selling.
See you then!
Like most sales techniques, however, there is a method to it. Since it comes naturally to most people to try to sell something by talking about how great it is, they often overlook the technology behind it. The biggest drawback to value-based selling is that if you do not do it properly, your customers will often spend little time listening to what you are telling them and more time waiting for the “catch”. Fortunately, there is a way to combat that.
Service is a little easier than product sales in that regard, because the potential customer already knows that your service does not come for free. Whether you are a plumber or an electrician making a service call to a residence, or a mechanic who had a car brought to you to diagnose – the prospect knows that if they hire you, there is money involved. The question at that point is how much you are going to charge and for what specific service.
You want the customer to listen to your pitch. You don’t want them to be so far in their head about money that they can’t hear all the good stuff you are going to tell them. I found it very useful to get that part out of the way immediately. The trick is to do it without giving them any kind of price that they could object to. Once they told me about the problem they were having, I simply told them, “Not a problem. Let’s take a look at it and see what it’s going to take to make that right for you. Then we can discuss your options and see what’s going to work for you. Don’t worry, looking is free. I won’t do anything that is going to cost you a penny without your permission, okay?”
First of all, my customer is not worried about the “clock” running or me giving her a bill for looking or anything like that. That person knows that they are not paying anything until THEY decide they want to. That gives them a feeling of control and allows them to relax a little and listen to my suggestions. I also mentioned options. Whenever possible, you should always offer options. I will talk more about that in a later article, but for now, trust me on that one.
Notice also that I ended the statement with a question. More importantly, it was a question to which the only real answer is “yes”. Yes is a very powerful word. You should ask a lot of questions to which the only answer is yes. Even statements should be followed often by questions; do you know what I mean? The prospect should always get used to saying the word “yes” to you. Avoid asking them “no” questions at all costs.
Okay, so you’ve presented yourself to the client, they have informed you of their need (as they understand it) and you have put them a bit at ease. Now they are in a great spot for you to push value. Actually, if you have been doing every thing right, you have already been pushing value. Remember the last article on the Sales Triad? If you followed that principle, you have been showing them respect. They likely noticed that and appreciated it. That begins to build value. Remember that you are clean? More value. The fact that you set their mind at ease, like in the example above, adds more value. You are already beginning to give them the reasons why they should listen to you and follow your advice, before you even began talking about the service.
The goal of value based selling is to get your client to agree to buy before they even know the price. Write that one down and keep it in your wallet. It sounds nearly impossible, and in some cases it is – but not as often as you would think. Whether or not you can get your client to the point where he is willing to sign a contract, without even knowing the cost of doing so, is not as important as you doing everything you can to try to get him/her there. Now, common sense dictates that you do not flat out refuse to give a price until they will sign your contract, but that doesn’t mean that you just give the price when asked, either. The rule of thumb is that if they are asking “how much?” they are not yet ready to hear the answer.
Okay, let me back up a bit and explain how we show value. The first way is by using the “Sales Triad” to build respect and trust. The next thing we do is one of the most important things we can do as sales people – we listen. Let me rephrase that: WE LISTEN! The single greatest contributing factor to successful sales is listening. It is what separates decent salesmen from superb salesmen. You need to know what is important to the customer. You need to pay attention to the clues that you see and in what they say. Let’s look at an example:
I go to Mrs. Smith’s home in response to her requesting service for leaking pipes under her sink. After the introductions and reassuring her that the estimate is free, she leads me to the kitchen where I find that the waste pipes under the sink are leaking all over the place. I also notice that the disposer is old and showing signs of rust. My next step should be to ask general questions and listen closely to the answers. I want to know what’s important to her.
Most plumbers would look at it and tell her, “Well, Mrs. Smith, it looks like all of the pipes under the sink are shot and the disposer is looking like it’s about to leak as well.” Mrs. Smith would let them know that she never uses the disposer, and asks why it would leak if she never uses it. The tech replies that these things just kind of happen. Sorry, but it need to be replaced. That’ll be $650 for all of it. The best case scenario for the tech there is that she says okay (because she doesn’t really know any better) but she feels a bad taste in her mouth. More likely, she will thank him for the estimate and send him away because she needs to “Talk to her husband”.
How would I recommend approaching this situation? Well, first of all, she doesn’t care about the disposer until you say “about to leak”. Then she’ll fix it because she thinks she has no other option. Hopefully, she turned the other guy away and called me afterward, because I will ask enough questions to know details of the encounter. Then I will ask her, “but if you don’t use the disposer, why was he trying to get you to replace it?” She would answer that it needed to be done because it was starting to leak, to which I would respond, “You don’t need to replace it to keep it from leaking. I’ll just remove it for you and put a regular sink drain in its place. That will allow me to replace the drain lines under the sink to make them flow better and be virtually leak proof, as well as open up more space under the sink so your cleaning supplies won’t feel so cramped AND save you $100 in the process.” Is there any way in the world that that customer does not fully belong to me at that point? Don’t worry about the $100 less. I’ll tell you later why that doesn’t matter.
You always want to get as much information from the customer as you can. Everything they tell you and show you will be used against them. If they care about warranty, you stress warranty. If it’s price, you let them know how they will be saving money. Whatever it is that is important to them is what you focus on. That is the part that people most often forget. It is also the part that will make sure that you are successful.
I think I am going to stop this here for now and pick it up with a part 2 in the next few days. There is still quite a bit to cover about value-based selling.
See you then!
