How to effectively communicate value of green products and services
Customer surveys continue to emphasize the stated importance of sustainability in the purchasing process, however recent interviews with industry leaders across both B2C and B2B reveal a growing rift between consumers’ stated preferences and their actual behavior.
Consider a customer deciding between two products, we’ll call them Product A and Product B. Product A is openly more sustainable, but more expensive. Product B, while less expensive, is openly less sustainable. In our experience working with industry leaders, there has been a consistent finding: most customers choose Product B. Yes, even the customers who initially stated that sustainability was of high importance.
For companies that want to monetize sustainability, now more than ever, it is essential to be adept at value selling.
What is value selling?
Value selling is a sales approach that focuses on emphasizing the unique value and benefits of a product or service to your target market. Rather than solely focusing on features and price, value selling seeks to understand the customer's needs, challenges, pain points, and goals, and then demonstrates how the final product can address those specific needs and deliver tangible value.
“The more you focus on the value of your product or service, the less important the price becomes.” — Brian Tracy
The key principle of value selling is to position the product or service as a solution that will bring measurable benefits and return on investment (ROI) for the customer. This requires your sales team to have a deep understanding of the customer's industry, business processes, and pain points, which enables them to articulate how the offering can improve efficiency, reduce costs, increase revenue, or solve other critical problems.
How to value sell?
At Simon-Kucher, we believe four major topics make up the core of value selling excellence.
1. Value Based Discovery: The first step in being able to sell value is to ensure you are asking your customers and prospects the right questions to understand what they value, why they value certain features, and how much they value those features. It is a grave mistake to think that each customer segment, let alone each individual customer, places the same value on different aspects of a product or service offering. Conducting research to determine market segmentation is crucial to forming your sales strategy.
2. Value Articulation: Train your sales team to focus the conversation on value rather than price. Value articulation focuses on how your product or service will provide financial value to the customer’s business. If we have mapped out a value tree for the customer’s business during the market segmentation process, we need to be able to go back and point to the lever of business performance that is improved through sustainability (for example, brand perception or stock multiple). Sometimes, it turns out that a different buyer cares about sustainability more than your original buyer. This means developing new customer relationships and creating new market segments.
3. Objection handling: Your sales team must also be able to handle price objections. Handling objections well can mean the difference between selling the sustainable product, achieving the target price increase, conceding to discount demands, or losing a customer due to insufficient differentiation. There are many ways to overcome specific objections with sales techniques or negotiation skills, but in many cases, selling a sustainable product or service involves returning to the customers’ stated values or priorities, and reminding them how to better align behaviors with goals. Of course, if there is other value associated with sustainability (such as diversified vendors, faster delivery time, etc.) then that always helps.
4. Selling Techniques: In addition to the financial and logical side, we also need to include the emotional dimensions of your sales strategy. There are plenty of examples of companies selling something intangible, or a product that provides the buyer with “good feelings”. Although this has been more prevalent in the consumer sector, B2B buyers are not exempt. Business organizations are not entirely financially motivated, and are also subject to the effects of the emotional dimension.
Since we already have alignment (or “logicality”) below in our VALUES framework, the other dimensions that are critical here are Empathy and Security. The buyer must develop a genuine connection with the seller, and the buyer must believe that there is integrity behind the claims of sustainability. The more detailed examples and case studies your sales teams can provide to their buyers, the better.
5. Selling Process: Lastly, the sales process must change, specifically the front-end discovery. The amount of effort required to understand your customer’s business, build additional empathetic relationships, and craft proposals that emphasize sustainability as a benefit to future customers Will substantially increase earnings for your shareholders. But if we believe in the mission of sustainable business, it is an investment we must make.
In conclusion, customers can say they value sustainability, but it is our responsibility to determine how much. Gathering that voice of the customer (VOC) research, doing the right conjoint analysis, and then preparing the sales force to sell the value of sustainability is critical. The good news is that a change in enterprise valuation multiple through sustainability usually dwarfs other levers in terms of ROI. The bad news is that sales will have to search for multiple buyers within the organization and do lots of research to get that value proposition across. It is not just competing with comparable players in the marketplace but competing with every other potential use of that additional budget required within the organization. That means your stakeholders need to be on board and your sales team needs every tool in their toolbox to build and negotiate that consensus.
Our team of sales experts will work closely with you to identify these opportunities and develop tailored solutions that align with your organization's specific growth needs. If you are ready to discuss your business’ needs and address your growth challenges, contact us today.