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Value-added Selling?

Copyright 2003, by Dave Kahle.

"Value-added." That word is used so much it has become a cliché in business circles. There may not be a business in the world that doesn't claim to be a "value-added" seller.

The problem is that once a word or phrase becomes a cliché, it often losses it's original meaning. This is true with "value-added." What exactly does that mean?

Ask six business principles what it means when they say that they are a "value-added" seller, and you'll likely hear six different explanations. One claims that they fulfill orders quickly, and that short waiting period is "of value" to their customers. Others claim that their experienced people bring value to their customers. Their customers do business with them because of the quality of their people. Others claim some unique technical expertise, others their sophisticated IT systems, some the breath of their inventory, still others reflect on the brand name products they handle.

I'm always a bit skeptical of this. Almost every business I work with claims to have better people, better service, and more technical expertise than all their competitors. What is puzzling to me is that their competitors say the same thing. Someone has an inaccurate perception.

The definitions grow even more obtuse when you ask salespeople what they mean by "value added." Some will claim that their customers demand a regular visit by the salesperson. Their routine presence, therefore, is valuable to the customer. Others, like their bosses, claim expertise as valuable. Many point to the long term relationship as the factor that brings the most value to the customer. On and on it goes.

The truth that we often overlook is this: Value is defined by the customer, not the supplier. It doesn't matter what you think your value is, it only matters what your customer believes it to be. And customers don't always think alike, so that the operating definition of value-added varies from customer to customer.

As our economy has grown more complex and competitive, the demands of the customer and their subsequent definitions of value have grown more varied. What was more or less universally valued a few years ago, is not anymore. For example, local inventory may have been universally valued in the 1990s, but today some customers would rather buy direct and absorb a longer shipping time. Experienced people may have been valuable to everyone a few years ago, but some customers today would rather gather their information off the internet and pay lower prices. Technical expertise may have been universally valuable a few years ago, but some customers today would rather reduce their purchasing costs through an integrated supply contract administered by the home office 500 miles away.

It's not that some of the things you have built into your business as value-added are no longer important, it is that some of then are no longer viewed, by significant numbers of your customers, as worth paying more for. They may be necessary, but they are not sufficient.

If you are going to be a true value-added seller in the 21st century marketplace, you must be flexible and capable enough to offer different things to different customers, responding to the individual customer's definition of what is valuable to him or her.

That means that you must have some way of ascertaining what is valuable to each of your customers, and then some processes in place that allows you to package, present and implement those aspects of your offer that appeal to the customer's individual definition.

The primary means of doing that is a highly trained sales force that is adept at the strategies and tactics that result in a deeper and broader understanding of what the customer really wants, what the customer really values, and what the customer will really pay for.

Unfortunately, much of the business world of is populated with technically-oriented salespeople who view their job as providing technical solutions to technical problems. While that certainly is a significant part of the job, and an excellent foundation for value-added selling, it is not sufficient. Others see themselves as face-to-face customer service people, visiting the customers on a regular, route basis in order to pick up orders and take care of details. Still others have evolved into comfort zones: working with the same customers, on the same product lines, in the same ways.

More and more, value is determined by deeper and broader issues than just those addressed by these limited perspectives. How the solution fits into the customer's business systems, the philosophy of the customer relative to its vendors, the strategic plans of the customer, the potential integration of customer/vendor IT systems, etc. - all these and more are just as likely to be the issues that the customer values.

If salespeople are going to adequately uncover these deeper issues, they'll need to excel at certain sales behaviors that go above and beyond just the ability to solve a technical problem, or show up regularly.

What must they excel at?

Specifically, value-added salespeople will need to enhance their ability to create positive business relationships with anyone and everyone. They'll need to relate to a variety of positions and job titles, like CEO, CFO, Vice President, as well as production supervisor or engineer Additionally, they'll need to expand their abilities to deal positively with a wide variety of personality styles. The sales person who remains in the comfort zone of production supervisors, purchasing agents and maintenance supervisors will severely limit his/her value.

Not only will effective salespeople need to create positive business relationships with everyone, they also will need to fine tune their skills in asking questions, listening constructively and ferreting out the deeper needs of those customers.

Those salespeople who can understand what each customer considers to be valuable to them, and then can bring creative solutions to those customers, will be the valuable value-added sellers.

What is encouraging about this is that each of these value-added selling skills is a learnable behavior. No one is born with the ability to ask penetrating questions, create positive relationships, listen constructively, or develop creative proposal and solutions.

These behaviors of the most effective value-added salespeople can each be learned. Once a minimum level of expertise is attained, sales people can continually improve on these behaviors of the rest of their selling career.

This is a great opportunity for the business who is intent on maintaining and expanding their position as a value-added seller. Those who develop systems that encourage the key sales behaviors, who train their sales people in those behaviors, and who stimulate them to continuously improve their implementation will be those who rise to the top as value-added sellers.


Dave Kahle offers a variety of resources that can help your business stay competitive in changing times. To learn you can reach Dave by phone at 800-331-1287 or send him an email request.

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Distribution companies, by their nature, should be sales-oriented companies. But, most distributors don't do sales very well. That's the premise behind this new book.

The book, written for sales managers and executives in the distribution industry, provides a blue print for executives to transform their sales forces into highly directable, effective, focused performers.

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His advice begins with "See it as a system," a concept that is based on one of the key principles for the book, "When you change the structure, you change the behavior of the people who work within that structure."
 
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