Discounting your value proposition is a common mistake that many salespeople make when they face price objections or competitive pressure. However, this can undermine your credibility, erode your margins, and weaken your relationship with your customers. In this article, you will learn how to avoid discounting your value proposition by following these six tips.
Before you can communicate your value proposition to your prospects, you need to understand it yourself. What are the benefits, outcomes, and solutions that you offer to your customers? How do you differentiate yourself from your competitors? How do you align your value proposition with your customers' needs, goals, and challenges? By answering these questions, you can create a clear and compelling value proposition that showcases your unique selling points and resonates with your target audience.
In a competitive landscape, a strong value proposition is vital. Avoid excessive discounts to retain perceived worth. Key Points: 1- Emphasize unique features & benefits for differentiation. 2- Showcase how your offerings solve customer needs & add value. 3- Prioritize quality, service & superior value in marketing. 4- Avoid excessive discounts; consider added value or promos. 5- Communicate value effectively without heavy price focus. 6- Build a strong brand identity & trust aligned with prop. 7- Continuously refine strategies based on feedback & trends. 8- Stay customer-focused for a robust market position.
What are the benefits, outcomes, and solutions that you offer to your customers? - Research all the products/services your company sells. - Understand what the ideal prospect is. - Make your own problem vs solution list. How do you differentiate yourself from your competitors? - Keep up to date with the latest about your market. - Create content to boost inbound leads & provide free value. - Focus on creating value not making sales. - Consistent communication. How do you align your value proposition with your customers' needs, goals, and challenges? - Use Neil Rackham’s SPIN framework. > What’s the situation? > What’s the most serious problem? > How does this impact the wider business & it’s people? > What solution is needed?
-Always uncover a big enough problem that is worth solving by getting by in from a champion, end users, and the economic buyer This should be tied to some sort of compelling event, too. If you are missing this, you likely don't have a deal.
Not every prospect is a good fit for your value proposition. Some may not have the budget, authority, need, or urgency to buy from you. Others may not appreciate or recognize your value proposition. Instead of wasting time and energy on low-quality prospects, you need to qualify them early and focus on those who are most likely to buy from you. You can use various criteria, such as BANT (budget, authority, need, and timeline), to assess your prospects' readiness and willingness to buy.
Ask these 2 questions: "You must have a ton going on in your world and a lot on your plate.. I'm curious, what makes this problem the biggest priority for you right now when you can be working on a bunch of other things?" OR "You've been at COMPANY for ~3 years and doing things this way for a long time... switching platforms seems like a daunting task.. knowing that, what's making you think about making a change right now?" They both came from a grounded, indifferent source of energy and truly were curious about the 'why' behind them wanting to change.
Discounting your value proposition can signal a lack of confidence and trust in yourself and your product or service. To avoid this, you need to build rapport and trust with your prospects throughout the sales process. You can do this by listening to their needs, showing empathy, asking open-ended questions, providing value-added information, sharing testimonials and case studies, and following up consistently. By building rapport and trust, you can establish yourself as a credible and reliable partner who can help your prospects achieve their desired outcomes.
One of the main reasons why salespeople discount their value proposition is to overcome price objections. However, price objections are often not the real issue, but rather a symptom of other underlying concerns or objections. Instead of jumping to offer discounts, you need to handle objections effectively by following these steps: acknowledge the objection, probe for the root cause, isolate the objection, answer the objection, and confirm the resolution. By doing this, you can address the real concerns of your prospects and demonstrate how your value proposition outweighs the price.
Handle objections by asking a question to clarify. Example: "We need some time to think about it.." "Sounds like there's a reason you need some more time to think it over"
Another way to avoid discounting your value proposition is to add value instead of reducing price. This means offering something extra or different that can enhance your value proposition and entice your prospects to buy from you. For example, you can offer a free trial, a bonus feature, a longer warranty, a faster delivery, or a better payment plan. However, you need to make sure that the added value is relevant, meaningful, and affordable for your prospects and yourself.
Sales teams often get to a point where they think that it is their job to "inform" their employers why their products can’t be sold at the price point that the business needs to sell it at. But our job has never been about telling colleagues why we're too expensive - it's to explain to the customers and prospects why we're not! If you think about it - hiring a sales team cost a small fortune. If it was genuinely all about - and only about - price, we could swap the sales function for a drop down menu on a website - and plough all those savings into slashing the price. Understand why existing clients are happy to pay and then work out how best to communicate that fact with your customers
Finally, you need to stand your ground and stick to your value proposition. This means being confident, assertive, and respectful when negotiating with your prospects. You need to communicate your value proposition clearly and confidently, and avoid using words or phrases that imply uncertainty or weakness, such as "maybe", "possibly", or "I'll try". You also need to respect your prospects' opinions and concerns, but not let them dictate your terms or conditions. You need to show them that you are willing to walk away if they don't value your value proposition.
The final hurdle can sometimes be the cost… “I am interested in your product, but budgets are tight at the moment because of the looming recession. We can’t afford the product at this cost. Is a discount possible?” The prospect perceives that there is a higher cost than value received from this transaction. Look to understand why they think this & what is their desired ROI.
Much of the time it's the sales person who has the problem with the price - rather than the prospect. As an example - how much would you sell me a brand new $20 note for? $15? Maybe $18? How about $19.99? Now you might be thinking; “Of course I wouldn’t accept less than $20, it’s a $20 note – I want $20 for it!” Which is fair enough – so why – when we give a sales team something to sell that’s priced at $20 – a large percentage would ask how much they’re allowed to move if the customer asks them for a deal? The reason is this: No one ever argues with the number written on a bank note. But very few people ever take the time or effort to build the same level of “belief” in the value of their own product or service.
Nobody minds paying – but no one wants to overpay. Take a look at your favourite customer – or a client who has been loyal to your business for years Or the last, massive order that went out the door. Ask those customers where they see the value, learn from them so that you can transfer the value that they’ve discovered onto others who need your help. Charge the right price – and then understand the problem your solving well enough to be able to justify the value. Don’t go out there desperately selling to people. Solve their problems and then charge them appropriately for it!