As a writer, I care deeply about words. Words and phrases have meanings. When used incorrectly, words can confuse others or obscure the meaning. The terms "creating value," "building value," and "adding value" are often used interchangeably. This makes it difficult to distinguish them.
These terms are used so often in sales, we should define what each means and how to apply them. Creating value is something you do in a sales conversation. Building value is what you do to increase the value proposition of your product or service. Adding value is what you do when you negotiate with a client.
Creating value takes place in the context of the sales conversation. The information you provide in the sales conversation should be valuable and interesting to the client. To ensure this, most modern sales approaches use value-creation strategies.
A simple example of value creation is providing your clients with market insights that they find interesting and relevant. This information should be something the client doesn’t already know but will benefit from having. By providing useful information, you are using a value-creation strategy designed to help your clients make an informed decision about their business. There are many ways to create value, and doing so becomes easier if you practice strategic empathy.
Creating value during the sales conversation is crucial in B2B selling. Even so, many B2B sales organizations still practice sales approaches that are not designed around the value their clients need them to create. The lack of value is why some salespeople can get a first meeting but not a second one. Creating value is a competitive advantage.
When you position your product or service, you build value. By talking up your features, benefits, and the strategic outcomes your client needs, you build value. Building value is important because it differentiates your offering from your competitors', especially if you sell similar products.
An easy example of building value comes from Apple. Every year, Apple releases a new iPhone that is an upgrade to the last edition. There is fanfare surrounding its release, helping Tim Cook and the company build the value of what they sell to customers. They go so far as to release each new phone with a formal launch event. They even create videos about the process and materials for constructing an iPhone. By building value with this strategy, and supporting their reputation for high-quality devices, Apple helps customers perceive that the iPhone is worth $1,200. Building value improves customers’ cost and benefit analysis. This is one way to sell a quality product.
The largest challenge in building value is that buyers believe what you sell is a commodity. There are so many companies with great products and services that it will be hard to stand out if you don’t build value. The field of worthy competition also makes that task more difficult. This is why some of us no longer believe that the value of the product or service is the largest variable to success in sales.Rather, the salesperson’s ability to create and build value will win deals. That is why it is so important to hone these skills.
Adding value is something you do in a negotiation by adding something to sweeten the offer. This is one way to win the deal without using a price concession.
A simple example is that your client complains about the price of a product or service. Instead of lowering your price, you offer them something that costs you little while improving your offer. It could be a service contract, an ancillary offering, or better payment terms. If you are a small business, offering free upgrades can allow you to be profitable.
This strategy is worth considering when you are asked to lower your prices. Eventually, it can improve your net profit and revenue. The challenge with adding value is that it doesn't always work. Some clients won't be moved by the value you can add and will continue to push for a lower price.
Successful businesses use all three of these strategies: creating value, building value, and adding value. Different sales scenarios require the right strategy.
Creating value: You want to create value in sales conversations. That is what causes your prospective clients to prefer you and your company over your competitors.
Building value: You build your products' value by positioning your offerings well.
Adding value: You should add value when you need to provide more value to win the deal without a price concession.
The One-Down salesperson who says they intend to add value to the sales conversation has proven they lack value-creation strategies. Most sales organizations lack value-creation strategies, relying instead on their offerings alone. Very few train their sales force, let alone in B2B strategies—and many sales training programs fail to address true value-creation strategies.
You should know and use these strategies in B2B sales when they are appropriate for the goals you are pursuing with your clients. Long-term success requires you to know and understand the strategies, tactics, and techniques that will help you win in sales. If you need more help, go here.