Although we have many industrial clients, the adoption of value-based selling still lags far behind other industries such as software, supply chain, telecommunications, and computer and networking hardware. I recently pondered why this might be the case.
For starters, ROI and value-based selling was born and really took off in the supply chain and enterprise software industries. Companies like i2, Manugistics and SAP pioneered selling based on the value that could be delivered. Thus, it makes sense that value selling is heavily adopted across those industries.
Likewise, since IT either drove or was heavily involved in buying enterprise software, it naturally follows that the telecommunications and computer and networking hardware industries would follow. This is especially true because enterprise software vendors could readily provide CIOs and IT managers with the business case they needed to close the deal.
So, why do industrial products still lag behind on realizing the benefits of value-based selling?
What’s Holding You Back?
I spent the first ten years of my career working as an engineer in an industrial manufacturing setting. Part of my job was performing economic evaluations on proposed projects and either recommending or rejecting these significant investments based on their cost-justification. I know first-hand that evaluating the economic business case is important to industrial customers. So why aren’t vendors and their sales teams driving that discussion more often?
I believe there are three primary reasons, all of which can be readily addressed to improve sales.
- Industrial purchases are usually very technical and specification driven and typically, the customer writes the specifications and evaluates various alternatives against those specs. Also, the process is usually driven by engineers, so the sales process naturally leans towards a feature-function discussion instead of a conversation about business value. Of course your offering must meet the customer’s specifications, but you need value to convince the economic buyers within a company to invest in your solution. Learn why a business case is better than a demo.
- Customers likely have their own people performing economic analyses on any significant purchase decision, just like I did early in my career as an electrical engineer. If the customer never asks your sales team for information about the product’s value, you may never know that any analysis is being done. Your offering may be rejected and you won’t know why. If sales is involved in the analysis, they can help the customer identify areas of value that they hadn’t considered. Letting customers do the economic analysis on their own leaves too much to chance. Step up and make sure they understand your offering’s benefits and the full value it could deliver.
- Perhaps the saddest reason industrial sales teams have not embraced value selling is because they don’t realize there’s a better way to sell. If they aren’t trained in value-based selling and don’t have tools to help customers’ understand their offering’s value, they can only continue selling with a feature-function approach. Industrial sales teams are likely comprised of engineers who are more comfortable with a technical sale than an economic sale. They need proper training that demonstrates how value-based selling can improve their performance, and proper tools that enable them to have conversations about both specs and economic business value.
ROI and value-based selling can be just as or even more effective for selling industrial products. Why? Because customers are likely doing an analysis on their own already, and you just aren’t part of the discussion. Arm your industrial sales team, and yourself, with the training and tools needed to provide the cost justification to make the sale without relying exclusively on selling the technical aspects of your offerings.