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Value-based selling Pekka Töytäri Aalto University School of Science Service Engineering and Management

Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

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Page 1: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

Value-based selling

Pekka Töytäri

Aalto University School of Science

Service Engineering and Management

Page 2: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto INVESTMENT ALTERNATIVE COMPARISON

INVESTMENT COST INVESTMENT COST

COST OF FUEL COST OF FUEL

COST OF OPERATING AND MAINTAINING

COST OF OPERATING AND MAINTAINING

The cost of producing

electricity over the lifecycle of a

power plant

CASE WÄRTSILÄ POWER PLANTS

POWER PLANT A POWER PLANT B

Page 3: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto TECHNOLOGICAL INNOVATION Increase of copper recovery by 1%

equals to of 2Meur increase of sales

revenues

SALES REVENUE FROM EXTRACTED MINERALS

SALES REVENUE FROM EXTRACTED MINERALS

CASE OUTOTEC FLOTATION

OLD MIXING MECHANISM NEW MIXING MECHANISM

ENERGY COST ENERGY COST

50 % energy decrease equals

to 100keur decrease of utility

cost

MAINTENANCE COST

MAINTENANCE COST

50% life time decrease equals to 50keur saving of

maintenance expenditure

Page 4: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto RIGHT SCOPE FOR DECISION-MAKING

Component cost A – 10 Eur Component cost B – 15 Eur

Increased energy consumption Increased lubrication need

Higher inventory cost Lower usability Lower reliability

Higher installation cost

Decreased energy consumption Decreased lubrication need

Lower inventory cost Improved usability Improved reliability

Lower installation cost

TCO 87,25 Eur TCO

57,00 Eur

TCO saving of 30,25 Eur

Case SKF bearings

Page 5: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto FROM BLUE OCEAN TO READ OCEAN

INNOVATION COMMODITY

Offering lifecycle

No active demand

Commoditization, competition on price, replacement purchases, ...

Active, growing demand

EXERCISE How are profitability, buyer/seller power positions changing over time?

Page 6: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto SYSTEMATIC DIFFERENTIATION

FUNCTIONALITY

AVAILABILITY

PERFORMANCE

PARTNERSHIP

•  Process outsourcing

•  Operating responsibility

•  Differentiation by (lifetime) performance

•  Mutual dependency •  Differentiation by

mutually developing competitiveness against other industry clusters

•  Comprehensive solution

•  Differentation by completeness, ease of cooperation

•  Product differentiators

Page 7: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto EARLY ACCESS TO INFLUENCE

Customer value provides compelling message to gain early access to influence and trigger customer’s investment and decision making process and escape the commodity trap

COMMITMENT SEARCH PRESSURE TO CHANGE SOLUTION VISION

Reactive ”specification based” approach

Proactive Value based approach

Page 8: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto VALUE SELLING KEY STEPS

•  Select an influential stakeholder

•  Share and agree on few salient business goals for the stakeholder

•  Share quantified reference stories demonstrating impact on salient goal(s) for evidence of previous successes

•  Conduct audit to determine improvement potential for the focal customer

•  Quantify value for the focal customer

GOAL

EVIDENCE

AUDIT

STAKEHOLDER

PROOF

Page 9: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto Value sales process tasks & tools

Page 10: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto AGREE ON BUSINESS GOALS

Page 11: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto SHARE QUANTIFIED REFERENCE STORIES

Page 12: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto Value quantification

Page 13: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto Key sales tools

Page 14: Value-based selling - Aalto€¦ · consultative and value-based selling approaches.” - (Aberdeen Group, 2011) • ”Paradigm shift in professional sales, away from the old feature/friendship

efecto VALUE SELLING AS COMPETITIVE ADVANTAGE

•  ”Best in class companies are far more likely than other firms to ”take the high road” with more holistic, consultative and value-based selling approaches.” - (Aberdeen Group, 2011)

•  ”Paradigm shift in professional sales, away from the old feature/friendship/price-based selling to highly educated buyer seeking the best total solution and maximum long term economic benefit”. - (Aberdeen Group, 2011)

•  Customer value is quickly establishing itself as dominant approach in selling innovative industrial services

0%

10%

20%

30%

40%

50%

60%

70%

80%

Best in Class

Industry average

Laggard

“We clearly translate features/benefits of our solution into

economic value we can articulate to customers”