The Adding Value Salesperson versus Commodity Selling

By | March 16, 2007

Salespeople’s ability to add value to the sales process is in direct proportion to the customer’s perception of how commoditised the product or service is they are buying.

A salesperson trying to add value through better needs/application alignment, contextual understanding, subtle reading of the customer’s pain points or clever networking (all elements of value based selling) when the customer wants the best price at a delivery to suit them, shows how difficult a job it is.

What makes a commodity a commodity?

  1. When there is plentiful supply.
  2. When to scope for differentiation is limited.
  3. When the market is generally open and transparent.
  4. When specifically, there is healthy, normalised (as opposed to cartel like) competition.
  5. When the buyer perceives their risk in making an independent purchasing decision is low because their amount of acquired knowledge makes them a sufficiently informed purchaser.

It’s this last point that is driving accelerated change. Access to knowledge and informed specialist advice used to be difficult, so expensive to get. Now, because of the internet, lower barriers to market entry (both regulatory and economic), globalisation and consumer/purchaser protection, many market landscapes have increasingly large areas of ‘commodity desert’ where a few oasis of effective companies thrive at the expense of others who can’t decide whether they’re a value-adding seller or a commodity trader. The worst position of all is to have the cost base of the former and the customer’s perception you are the latter. Think of a full service airline competing on the same routes as a budget airline.

There are two ways to create a meaningful role for the salesperson:

  1. (Constantly) add more value to your sales proposition that appeals to the customer, that the customer needs help in using effectively. The salesperson is the conduit to optimising that new value.
  2. The sales person becomes a thought leader around that additional value, sharing with the customer new angles perspectives and insights that are shaping the industry/sector.

When both of these strategies are effectively deployed the impact is even more significant.

For more an informal discussion around moving your value proposition up the value chain contact us.

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