Introduction
“The man who does not read has no advantage over the man who cannot read.”
—Mark Twain
Everyone has habits—good and bad. Reading and professional study are habits, just like not reading and not studying are habits. Some habits change your life for the better and some change your life for the worse. One fact remains: our habits define the person we are. What impact do your reading and study habits have on your career? Here is a sampling of what we hear in our seminars:
“I’m too busy to read.”
“I don’t know what to read; there is so much out there.”
“I don’t like to read.”
“When I come home from a long day, I’m too tired to read.”
“I read so much work-related material I have no time for any other reading.”
“I read a book once.”
Reading is a positive habit for salespeople to have. Reading stretches the mind and expands one’s vocabulary. It raises new questions and helps people discover new answers to old ones. Reading challenges rigid belief systems. It relaxes our mind while developing our analytical thinking skills. Reading makes people more interesting and allows them to be more empathic. Reading changes the person, and that experience becomes part of one’s journey.
For these reasons and more, reading is the key to success in any profession. In fact, many great leaders in our society today are deep readers: Warren Buffet spends 80 percent of his workday reading.1
Bill Gates reads 50 books a year.
Elon Musk read two books a day, according to his brother. When asked how he learned to build rockets, Musk replied, “I read books.”2
President Theodore Roosevelt’s daily routine included reading an entire book in the morning before starting his formal duties as president.3
President John F. Kennedy read a legendary 2,500 words per minute and consumed six newspapers, cover to cover, with his daily breakfast.4
Mark Cuban reads three hours every day.5
J. K. Rowling has ignited a firestorm of young readers with her Harry Potter series. Her advice is as relevant for salespeople as it is for the youth: “Read as much as you possibly can. Nothing will help you as much as reading.”6
In 2016, there were 674 million books sold in the United States.7 How many of these did you read? If you’re into trivia, about 23 percent of these were e-books.8 Reading is just as important to success in sales as it is to quality leadership. Customers want to deal with knowledgeable and articulate salespeople. They want to buy from salespeople who empathize and understand buyers’ needs and wants. Customers want to partner with salespeople who are on the right side of the growth curve. Reading sends a strong signal to others. It demonstrates a commitment to personal growth. It displays openness to new ideas. It reveals a desire for information that gives a competitive edge. Reading this book offers the opportunity and information to grow personally and professionally.
We are thrilled to bring you this fourth edition of Value-Added Selling. This new edition demonstrates our commitment to sharing with you the latest information available to keep you one step ahead of the competition. Value-Added Selling is a dynamic and evolving sales philosophy. It remains a content-rich message of hope, and we are proud to be its messengers. We are advocates for this enriching business philosophy because we know it works. For decades, we have witnessed firsthand the successes companies in every industry have enjoyed by practicing this pragmatic go-to-market strategy. Though the fourth edition reflects the realities of selling in the digital age, the history of Value-Added Selling is rich.
Its roots reach back to the 1970s when Tom began his sales career at a Fortune 500 chemical company. That experience of selling in a commoditized, price-sensitive market played a formative role in helping him shape a pragmatic sales philosophy. After enjoying success in manufacturing, Tom opened a distributorship in the laboratory supply industry in Houston, Texas. He likened this experience in distribution to customers choosing from a row of a half-dozen vending machines. He said, “Everyone in town sold the same stuff, and our great challenge was to figure out a way to get customers to insert their purchase orders into our vending machine.” This experience proved to be a primer on how to compete without being the cheapest. He says today, “We were too small to compete on price. Imagine a corner hardware store attempting to sell cheaper than Home Depot.”
Tom sold his company in 1981 to pursue a sales training career. For the first few years of training salespeople, he amassed a list of objections that salespeople brought to seminars. The most common objection was, “Your price is too high.” It surfaced in many forms: “I can buy this cheaper from someone else.” “I don’t see your value.” “I don’t have the budget for what you’re selling.” All of these pointed to money as the primary obstacle. Sound familiar?
In 1984, Tom wrote the first edition of Value-Added Selling to help salespeople compete profitably and aggressively in price-sensitive markets. Since then, Value-Added Selling has become a global phenomenon. This message has touched salespeople in all corners of the world.
In 2013, Paul joined Tom Reilly Training as an associate and became a brand specialist on Value-Added Selling. Before joining Tom Reilly Training, Paul spent over ten years applying the principles of Value-Added Selling as a professional salesperson in the industrial and construction markets. He sold propane, tools and fasteners, and medical equipment. Although each one of these industries is unique, they shared a common challenge for salespeople: price sensitivity. When Paul experienced the power of Value-Added Selling firsthand, he decided that he wanted to become a standard bearer for this sales philosophy.
Much has changed since we released the third edition in 2010. Our economy has expanded. The United States’ GDP growth rate (25 percent) is double the rate of inflation (13 percent) during that same era. This points to real economic growth. Imports have increased by 33 percent during that same period, and our trade gap continues to hover at 500 billion USD annually. In this same time period, the U.S. Dollar Index has increased 19.24 percent,9 which creates additional headwinds for our exporting goods and services. Common sense tells us that the increase in imports is not from more expensive goods; it is from more of the same at lower prices. We are flooded with more and cheaper goods. The impact of this on selling price is a major challenge for U.S. businesses.
The top-line pressures of sameness, technology, and a culture of cheap present strategic and tactical challenges to the bottom lines of most organizations. “Sameness” is the commoditization of products and the convergence of services resulting from high levels of mergers and acquisitions, lack of innovation, and a failure to differentiate one’s solution.
Technology has been a burden and a blessing. Though professional selling is a people business, technology has depersonalized buyer-seller relationships and made purchasing more transactional. Technology has given birth to a plethora of online sellers offering customers a misery of choices, in multiple colors and myriad sizes. A Google search for industrial supplies, agricultural products, construction equipment, computer and technology solutions, and business services yielded 43.1 million, 67.1 million, 80.3 million, 129 million, and 269 million hits respectively. Pew Research found in 2016 that 80 percent of consumers shop at least sometimes online with half of those shopping online weekly.10 Technology has opened a Pandora’s box of supply alternatives that has increased pressure on prices and muddied the waters of differentiation.
A culture of cheapness exacerbates price pressure. Value is now a euphemism for cheap—value pricing, value meals, and value investing. Advertisers use low prices to attract shoppers. When was the last time you watched a television commercial and heard car dealers brag about high prices? Though in 2017 only 10 percent of all retail was sold online,11 with Amazon getting 44 percent of that, businesses are concerned about “the Amazon effect” on retailers, large and small, and B2B sellers.12
These strategic challenges for businesses present specific tactical challenges for salespeople. With the culture of cheap as the backdrop, the most common sales objection heard today remains, “Your price is too high.” In our research, we asked several hundred salespeople to rank their top sales challenges. These are the top six concerns:
• Price-sensitive customers
• Inertia (see no reason to change)
• Communicating value
• Buyers that commoditize
• Differentiating
• Getting credit for value added
Five of the top six challenges focus on money-related issues. This is the challenge for salespeople—how to communicate their value and convince buyers that the salesperson’s solution is the best way to go.
Much has changed since we released the third edition in 2010, yet much has remained the same. What remains the same is that buyers want value. They want to feel they are getting as good as they are giving. They want to feel like their suppliers understand their needs and respond accordingly. They want knowledgeable salespeople who can demonstrate and prove the value of their solution in the customer’s world.
Our goals in this new edition of Value-Added Selling are to help you compete effectively and profitably in this market. We want to help you focus on the type of business that makes sense for your company, navigate these accounts effectively, communicate your value in unmistakable terms, stand out from the competition, deliver high-value solutions that make a difference for your customers, get credit for the value you help create, and fully leverage these relationships. In short, we want to help you confront the tactical challenges you face and emerge victorious for you and the customer.
You will see familiar ground in this edition. The underlying principles of Value-Added Selling are timeless truths that do not change. We have updated our research and changed some of the terms to reflect the realities of today’s marketplace.
We’ve organized Value-Added Selling into four parts. Part I introduces you to the Value-Added Selling philosophy and provides you with valuable insight into what customers really want from suppliers. You will learn how to understand your value from the customer’s perspective and to create sales tools that help you persuasively communicate your value to customers. Additionally, we share with you inside information from our studies of buyer preferences. Part I answers the question, “Why should I embrace the Value-Added Selling philosophy?”
Part II is the strategic side of Value-Added Selling. You learn that value-added salespeople employ 11 strategies to create value for the customer. This part answers the question, “What should I do to sell our value-added solution?”
Part III is the tactical side of Value-Added Selling. Here, you learn the steps of the value-added sales call: how to prepare, execute, and evaluate your selling activities. This part answers the question, “How do I make the value-added sales call?”
Part IV is a bonus—true value added. In this part, we discuss additional topics for value-added salespeople: selling to multiple decision makers, competing against online sellers, and engaging inside salespeople in the Value-Added Selling process.
These are some of the updates you will see in this new edition:
• How to start and sustain a movement. In this fourth edition, we look at how managers start and sustain a movement toward Value-Added Selling throughout the organization. Value-Added Selling is a unifying philosophy for the entire organization, and this action-oriented chapter helps managers operationalize this philosophy companywide.
• Small-wins selling. The small-wins philosophy has deep roots in social psychology that has migrated into the business world. Taking a small-wins approach keeps both the salesperson and buyer engaged. It focuses on the immediate, next best outcome to move along the sale. The new way to attain big results is to think small.
• Critical sales path. We have expanded our discussion on how the buyer’s Critical Buying Path has a parallel path that the value-added salesperson travels. Your knowledge of this new material coupled with a small-wins approach will help you advance the sale with greater efficiency and effectiveness.
• The pain proposition. This addition to our section on customer messaging is based on extensive research on the psychology of decision making. Buyers want to avoid pain at least as much as they want to achieve a gain. The success of this concept is one of the driving forces behind this revised edition.
• Communicating with social media. The use of social media is a major shift in purchasing behavior since the third edition of this book. It offers value-added salespeople one more way to surround customers with their messages of value.
• Calling data. Since the third edition of Value-Added Selling, we have conducted extensive research into the calling habits of effective salespeople. Contrary to a common belief, we found that cold-calling remains an effective way to initiate contact with prospects. We share with you the findings of this comprehensive calling habits study.
• Handling objections. Our latest price-sensitivity study revealed the top four reasons buyers object on price. Armed with this new information, we demonstrate how to craft your response to price objections.
• Selling to multiple decision makers. This chapter provides a broad context for team selling in a collaborative environment of multiple decision makers. This includes new information into current buying trends and who is involved in the decision process. We equip the reader with specific tools and actions to manage a complex sale with multiple decision makers.
• Competing in an Amazon world. Face-to-face selling remains a viable go-to-market strategy, though many salespeople feel helpless against online sellers. One of the most troubling objections salespeople hear is, “Why should I buy from you? I can buy the same thing online for less.” This question (not objection) is really a gift for value-added salespeople. In this chapter, we provide the reader with strategies and tactics for selling against online sellers.
• Value-added inside sales. Value-Added Selling is a team sport. It requires the commitment of every department. In this chapter, we conduct a deep dive into the role inside sales plays in creating value for the customer and their outside sales counterparts. We also address the specific challenges facing inside salespeople. We have collected new data that forms the basis for the compelling need of including inside salespeople.
Our goal is to help you capture the most value from your reading and study of the fourth edition of Value-Added Selling. To this end, we suggest that you begin with a highlighter and an open mind. Value-Added Selling is a book to study, not just to read. To get the most value from this book, you will need to read and reread the passages you highlight. Understand the logic of this sales approach. Embrace the philosophy. Practice the strategies and tactics presented in these pages. Your value proposition for doing all of the above is to be able to compete aggressively and profitably as you deliver greater value to your customers. The real bonus is that you will like how it feels to work and live as a person of value. Enjoy your study.
Good luck.
Tom Reilly
Paul Reilly