On November 11 – 13, the Alexander Group conducted the 12th annual Chief Sales Executive Forum at the St. Regis Resort in Monarch Beach, CA, where more than 170 top sales executives explored how sales organizations can add value to the products they sell. Why does this subject command such attention? Because…
This year’s Forum offered keen insight into each of these areas. What follows is more detail.
What is Value Selling?
Specifics vary by industry and company, but a common theme emerged. Value Selling occurs when sellers provide insights that enable the customer to improve some aspect of its business. Insight might improve efficiency. It might boost effectiveness or even help the customer achieve some differential advantage. It is advice on how to use the products sold to do something differently and better. The “value segment” is not defined by size or industry. It is comprised of companies large and small, across many industries that turn to their vendors/partners for advice and are willing to reward those who provide them with good margins and lasting relationships.
How important is the Customer Segment that Seeks Value?
Not all customers want advice…or are willing to pay a premium for it. But many are. How many? For an estimate, Forum guests participated in a real-time survey where they were asked, “How big is the value segment as a percent of the market served?” Here is their response on the right.
As you can see, half of the executives surveyed said the value segment made up 21% to 40% of their market. Another third indicated it was 41% or more. In most cases, therefore, the “value segment” is a sizable chunk of the addressable market.
As important, the value segment is believed critical to achieving growth objectives. More than 50% of executives said the value segment is growing either faster or much faster than the market. As well, the table below shows how executives answered this question, “How important is the value segment to achieving their growth objectives?”
Virtually all of the participating executives asserted that the value segment is at least moderately important to reaching their growth objective. Almost 72% said this segment is very important.
The segment is big; it is growing, and it is important. As a result, executives are seeking ways to increase their share of it.
How is value delivered?
We asked whether executives were planning to enhance their ability to deliver value to customers in 2014. Here is what they said:
Among those surveyed, 50% plan to invest significantly to enhance their capabilities in value delivery. Where are these executives planning to invest? See the graph below.
More than 25% will invest in additional Solution Specialists, with another 13% investing in Solutions Training. Just under 20% will invest in developing their Account Management capabilities. Among the executives surveyed, it is reasonable to conclude they believe that success in value selling requires investment a) in building the capability to understand what accounts need; and b) in specialists who can deliver solutions to their issues.
When asked about how they planned to enhance their sales forces’ skills, these same executives told us that Account Management Training and new Tools to Help Manage Selling Complexity would be their primary focus:
Finally, we asked these sales executives what value-seeking customers hope to accomplish with the insight their sellers deliver. Here is what they said:
As you can see, there is no overwhelming “winner” here. Value-seeking customers want to save money, bring in more revenue and find new insights in about equal measure. But there is a clear loser; value-seeking customers do not put a priority on cost. Executives are quick to point out that cost of course remains a factor. But pricing premiums are possible if benefits in other areas outweigh the premium.
The conclusions are straightforward. If you want growth at a profit, you had better be prepared to build your share among customers who value insight. More than 170 sales leaders at the 2013 Chief Sales Executive Forum certainly are.
Learn more about Alexander Group’s upcoming 2014 Chief Sales Executive events.