The Deep Advantage of Value SellingThe Deep Advantage of Value Selling

The Deep Advantage of Value Selling Transcript:

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White.

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White, and joining me today is Carman Pirie. Carman, how you doing, sir?

Carman Pirie: I’m doing well. I’m happy to be here. Happy to be here and excited for today’s conversation.

Jeff White: Yeah, I mean, the notion of a value selling is something that I find incredibly interesting, and there’s always something I can learn. 

Carman Pirie: Yeah. And you know what? I’m maybe I hate when I go down this path a little bit because sometimes it sounds like I’m trying to sow distrust or something between marketing and sales or that I don’t want them to get along. And that’s not the case. But I’m saying it’s kind of interesting to have somebody from the marketing side teaching salespeople about value selling. You don’t hear about that one very often.

Jeff White: That’s certainly true. I agree with you. So why don’t we get into it? Today, we’re welcoming Neelam Kumar, the corporate director of marketing at Meridian Adhesives. Welcome to The Kula Ring, Neelam.

Neelam Kumar: Thank you for having me. I’m excited to be here. This topic is very close to my heart, so I am looking forward to chatting about value selling.

Jeff White: Not only, as Carmen mentioned, you know, a person in marketing teaching salespeople how to do value selling, but an engineer in marketing, teaching salespeople how to do value selling. Tell us about your your back story.

Neelam Kumar: Oh, yes. I have a chemical engineering degree, but I left that engineering discipline a long time ago, and I decided to do what they call the dark side. So here I am. That being said, I’ve always, you know, during my professional journey, I’ve always kept that engineering mindset and selectively picked an opportunity that would allow me to stay true to my engineer, the nerd in me.

Carman Pirie: And Meridian Adhesives, Tell us a bit about the company, if you would.

Neelam Kumar: Yeah. So Meridian Adhesives is a global solution provider of adhesive technologies. We sell adhesive technologies in a variety of industries, all the ways starting from electronics, and semiconductors to medical devices, aerospace and defence, to building and construction, flooring adhesives, and infrastructure adhesives that are used in the building of roads and bridges to assembly and packaging materials. So a very broad range of technologies that go into hundreds of different markets and applications. So that’s Meridian and a great company with, a great product selection.

Carman Pirie: I’m curious in a minute when you think of you know, that many verticals, do you have a number of salespeople selling across multiple verticals or do they tend to have a specialty area?

Neelam Kumar: No. Typically our sales team is aligned by industry verticals because, you know, given the nature of our products and markets, we need that special connection with customers and industry and competitors are different for each one of those sectors. So that lends itself to that kind of structure.

Carman Pirie: Yeah, would have guessed that, but I also would have guessed that, that’s going to make your job teaching value selling and promoting value selling in the organization even more difficult.

Neelam Kumar: Yeah, I’m learning just as much as I’m teaching.

Jeff White: I wonder, though, is it more difficult than selling in geographic regions, which an awful lot of organization, manufacturing especially kind of break down into, as opposed to selling into industry verticals?

Neelam Kumar: Well, so we have a mix of both. You know, even within the verticals. So our sales teams are organized for the most part geographically. So we have that too.

Jeff White: Hmm. 

Carman Pirie: Yeah. Jeff, I mean, my thinking was that salespeople say in life sciences might be a very different breed than in, say, another vertical, whereas there is a possibility in my mind when I ask the question that you have people selling across multiple verticals. So maybe the salespeople were a bit more, for lack of a better term more homogenous. Anyway, nevertheless, that’s where I was trying to pry. But, Neelam, how do you, I want to learn about how you’re going about kind of evangelizing, if you will, value selling in the organization, and the path that takes. But before we get into that, how did you get interested in it in the first place?

Neelam Kumar: So, you know, along my career, I have found a lot of good mentors and coaches and champions. And along came a coach that taught me the value of value selling and eventually that put me on the path to being a coach of value selling to the sales team, to other people in the marketing department, and just general people that I come across, you know, through my network. And this has just become a topic that I am very passionate about, you know, particularly coming from the manufacturing sector, industrial sector, we often think of value in terms of benefits, and that’s where we stop, right? We talk about materials. Here’s the features of the material and then here’s the benefits of the material. And more often than not, you will see even the most experienced marketers stop right there. You know, you put together your data sheets or features or benefits and you pass it down to your sales team. What we often, particularly in the world of advanced materials, we often forget to dig deeper is the value, right? You go one step beyond the benefit of the product to the value of your offer. And that’s that’s what I am interested in when I talk to my sales team or learn about their customers take it another step deeper, maybe three steps deeper to fully comprehend that value.

Jeff White: If you’re talking to the sales team and you’re asking them to go deeper, you know, two or three levels deep into that organization, what do you mean? Like, are we talking about the fact that value means something different to the CEO than it does to a plant floor operator? Or are we going to that level or where are you going with that?

Neelam Kumar: So it’s both. It’s horizontal, as in understanding what that value means for the application in which the customer is deploying our product. Right? So that value could be, for instance, in a process industry or manufacturing sector, that could be a restorative value. So our product might be helping the customer resolve a chronic problem. So that’s the value, you know, what’s the dollar associated with that, the problem that they’re solving, how is it helping them add to their bottom line? Right. They’re saving something somewhere. It could be preventative. It might be preventing the customer from having a competitive disadvantage. So what is the customer able to gain out of that prevention? Right. That value could be opportunistic. What opportunities does it offer? Does the customer is the customer able to now go after new markets? Is the customer able to increase their price because of the value that your product has added to either their products or their processes? Right. So that’s the understanding of the actual dollar amount as in value. And then the second side of it is how do you communicate and articulate that value For that you have to know your audience, right? So if you are within your customer organization, who are you reaching out to? Who is your network, your high, wide and deep network? Are you talking to the buyers? Are you talking to the supply chain people, the R&D people? You have to know what drives them, and then you have to find the language that connects with them. So if you have an R&D person, you know that the velocity of their new product or pipeline is what drives them, right? So you have to articulate the benefit of your product in that context. Or if you’re talking to someone from the supply chain, you know, the working capital drives them. So are you able to articulate the value of your product in that context? So that’s extremely important to understand your audience and then the language that they speak.

Carman Pirie: I want to try a little bit on this because one component to the implementation of value selling, I think at its most, perhaps you’ll correct me, I’m not sure, but I think somewhat at its most advanced implementations you find that it’s coupled with value pricing. So the price is not the same for customer X as it is for customer Y, the price is changed due to the value being delivered in that particular application?

Neelam Kumar: Absolutely.

Carman Pirie: Do you coach to get to that level in your work on value selling or are we still operating from more of a, you know, standardized pricing sheets and whatnot? And this is a way of positioning your value.

Neelam Kumar: No, So if you if you are not able to get to that capture of the value, then what’s the what’s the point of this exercise? Right? So typically when we talk about value selling or the selling value approach, there are five C’s. You know, you comprehend the process through analysis of your target customer activity cycle or their business, and then you create the process step that involves using your product to a certain advantage, and then you communicate the differentiated offering of your value. So you comprehend, create, communicate, and then you create your messaging to convince that, yep, there is there’s a value. Your sales team is fully educated on that toolkit to be able to constantly deploy that to convince their target customers. And then last but most important is capture, right? So through that exercise, to answer your question, capture is the last and final step is when we can capture the value as sellers in our product sale price. So that comes through, as you rightfully pointed out, the analysis of economic value, EV calculation, right? So there’s a dollar dollar price that the customer might see as a cost of material that they buy from us. But eventually, it’s the economic value of the offer, not just the cost of the product. And that’s what we get to typically you would get that by looking at the benchmark value of the next best alternative, right? It could be a competitor’s brought up or material. That’s your benchmark price. And then you look at your differentiated offer and you look at what are the positive differentiations you are offering, the dollars associated with that that you would have hopefully captured through your value-based questioning, as well as if there are any points of negative offer in your solution. So you look at all those three and that helps you calculate what is the economic value of your offer and that’s what helps you price based on value, not just on cost.

Carman Pirie: And I’m I’m sticking with you here. I’m curious about the weight of marketing versus sales in this exchange. How much of that distillation of economic value in a specific application is maybe application specific, and therefore it applies to a number of accounts and marketing is creating messaging around that versus value that is very account specific 1 to 1 and maybe weighs a bit more on sales that communicate that value. Any guidance or commentary on the balance between those two?

Neelam Kumar: Absolutely. So clearly, you know, given the ratio of sales force versus marketing people in any organization, you will always have marketing resources very tight, Right? That being said, it’s also a fact that in this day and age, by the time your customers get to you, they have already made up their minds in some way, shape or form. Right. I think there’s a statistic out there and they say they have made up 70% of their mind along the decision-making process. Right. So communication of the values starts way before your salespeople are even talking to your potential customers. So they’re marketing, the value of marketing, not just understanding that offer, but also start building those tools, whether you deploy them on general distribution channels or whether you save those tools to be deployed by your sales team. That lies with marketing, which starts with understanding your capabilities your differentiation and your benefits and values, and then understanding all your next best alternatives, understanding the activity cycles, and eventually helping your sales team proactively prepare for handling, to handling objections. Anticipate what your customers might think or might proceed with. Might want to know and to task your sales team, irrespective of if it’s a singular customer opportunity or a market-wide opportunity and anticipate potential objections or bottlenecks and prepare your sales team in advance to them dealing with those customers. That all becomes part of the toolkit, especially in this day and age, even before your customer just reaches your sales team.

Jeff White: Neelam, I’m wondering, you’ve deployed this process and landed a new customer and then you’re looking to expand the account. Does this take on a different form when you’re looking within existing accounts to grow the share of wallet that you have there? How are you approaching that in a different way?

Neelam Kumar: Absolutely. Absolutely. So you have probably heard me talk about the activity cycle. So when you are an outsider, right? The process industry, manufacturing industry, industrial organizations in their processes, you know, each step of the process is a combination of five, ten, 15, 20 different activities that lead to that last step and understanding of that whole cycle is extremely important to fully understand where are the pains that can be eliminated in that cycle? What can be raised, what can be reduced, and how your products or services can play a role there? That’s extremely important in raising your share of wallet. You know, for example, you might be selling into an activity cycle where disposing of a stream of waste material is a challenge. And unless you have fully comprehended, that activity cycle, you just don’t know that. Right? And imagine if that’s a pain point for your customer and through your offer, you can bring them a solution to somehow either recycle it or build that waste cycle in a different process stream and reduce that pain for the customer. So always in those engagements, thinking through what can be raised, reduced, eliminated, made better, that will not just bring, you know, build the trust between the customer and the salespeople, but also integrate our offer with the customer’s pain points.

Carman Pirie: And I would assume that you know, based upon either an existing customer, your knowledge of them will be deeper. Your ability to find those pain points will be greater, and your ability to articulate the value you’re delivering becomes even greater.

Neelam Kumar: That is always the hope.

Jeff White: That was kind of what I was driving at. Like, does it always work out?

Neelam Kumar: Yes, Yes. That’s always the hope. Oftentimes we think we do, but oftentimes you are always very surprised at how much we don’t know. And that’s why, you know, I always insist on high, wide and deep relationship management, because what you would learn from someone who’s sitting in an office is vastly different from what you would learn from, you know, an operator who’s running that machine day in, day out or handling your material day in, day out in the warehouse. So, yeah, there’s there’s always more to be learned.

Carman Pirie: Neelam, I’d like to know. I mean, it seems to me that part of this is getting to, you know, instilling in the marketing and sales organization even the language of value. How do you speak about value? And, you know, and some of that is, you may be talking to customers about value in ways that they’re not used to experiencing. Maybe the other people who sell to them don’t talk about value in that way. Don’t drive the conversation to that. Maybe I will stop there. So have you encountered that component of it, where you’re where the salespeople are like, you know what these are? These aren’t. It’s not just that we’re not used to having these conversations, our customers aren’t used to having these conversations.

Neelam Kumar: Yes, absolutely. And I think that often could become a challenge, right? Especially when you’re talking about companies that I have been part of throughout my career. Right. Organizations that have grown through acquisition. Right. Organizations that have brought people from different markets, different industries, different mindsets, different geographies, and different companies together as part of one team. And now you’re talking about how we harmonize the way we talk about our sales process, our marketing process, and having that harmonizing language. So we are all understanding what we speak internally is extremely important. And of course, it’s important to converse it externally, but it’s even more important internally when we talk about, you know, how do you talk about your sales cycle? How do you talk about your opportunity funnel, What are your seven stages of the funnel? How do you define them? What are your strategies at each of those funnel of the process of how do you talk about your gap discoveries? So that’s definitely what I see as a bigger challenge internally because your customer set is always going to be diverse. They’re always going to be speaking in their own language. But within the organization, having that harmonization is extremely important. So we can learn from each other, teach each other and, you know, be on the same page. Really.

Carman Pirie: I’m not going to let you away that easy with that, though, because I just feel like on the customer side, there’s I appreciate what you said, though. They’re all speaking a kind of a different language anyway. And there’s a diversity there that you’re having to navigate. So you’re going to have to navigate it regardless. And so that makes total sense to me. I’m imagining the sales process where you’ve actually had a nice value conversation. You’ve gotten to that place with the person you’re selling to, and you’re kind of at that 11th hour of the sales process and now procurement is involved and procurement doesn’t even know the letter V exists in the alphabet, let alone the term value. Like it’s about price. Like what’s the cost of this versus the competitor? Don’t tell me about the fancy promises that you’re making Mr. and Mrs. salesperson. How do we what do we do then? How do we get procurement to speak the language of value?

Neelam Kumar: So, that’s great because the good news is that there is not one language of value. Language of value changes with the target audience. Right. And I think we touched on that a little bit. If you are speaking the language right, there are so many ways you are creating value for your customer and really your customer. It’s best if they don’t if they don’t feel that you’re trying to sell them something other than your product because you are selling them insight into the market, you’re selling them your product development excellence, you are selling them. It could be regulatory support, you are selling them risk mitigation, you are selling them your service capabilities, you are selling them your global supply chain excellence. So as long as your sales language is matching the language of your target audience, it will hit.

Jeff White: Even if they’re saying, Yeah, but everybody else will do it for X number of dollars per gallon, how come yours is so much more expensive?

Neelam Kumar: And that’s where the work that you would have done in thinking through the potential scenarios, thinking through the potential objections and giving your sales team the tools to handle those objections in what you’ve learned about the customer application, the value cycle, right? You could have advantages in other ways. You could have advantages in your speed and your agility. You could have advantages in the way you back your product that your competitors don’t. You could have an advantage in the fact that you could tweak the formulation for your customers that your competitors may not. So that’s why you’re having that full breadth of discussion and your value proposition, not just your product but the value versus competition versus market conditions, work versus freight and logistics versus their location and your location advantage. There are hundreds of different things that could be weaved into that value conversation.

Jeff White: That is such a wonderful encapsulation of how to deal with those objections with actual value that matters to those particular organizations. It’s just, that the examples are so numerous and I really think that really encapsulates it for me.

Neelam Kumar: These days, customers are forcing almost all their suppliers into commodity chains very aggressively, you can say, denying the uniqueness of their supplier base. So if suppliers cannot escape those commodity chains, they will be they are they’re forced into competing purely on price, and then suppliers find themselves powerless. So value-based selling helps suppliers get out of that mindset. As suppliers, first, we have to get out of that mindset. Only then we can help our customers look at us differently.

Carman Pirie: It’s that mine set that I want to take on a little bit. Have you ever found that encouraging your organization you’re working forward to become a better buyer of value helps them become a better value seller?

Neelam Kumar: You could not have said it any better. 

Carman Pirie: Okay. 

Neelam Kumar: So you know value selling before you actually start value selling, you just need to value sell the value to your internal teams.

Carman Pirie: I’m thinking about like, you know, every manufacturer out there is looking to maybe implement value selling because they want to get good margins. They also have a procurement team that’s trying to push their suppliers into a commodity position. And I think one of the ways you can look at that and say, you know what, that’s procurements job and we’re going to let them get really good at that and marketing and sales over here is going to be talking value. I kind of like the idea, maybe it’s just the contrarian in me, this notion of maybe like the change starts within in terms of changing your own procurement team to be, to have a nose for value versus just a nose for price.

Neelam Kumar: And that’s that’s absolutely right. Because and you know, even as a marketer, when we talk about value selling, you know, we’re not talking about being untrue, right? Or being fluffy in your value propositions. We are really talking about digging deeper and understanding better, not just your own product, but what the customer does with your product. What’s their cycle, what’s their economies, what their economies are, and be authentic, right? It’s okay if your product doesn’t do the job, go refer them to competition. You will only build trust by doing that, right? So next time they need something, they’ll come to you knowing that you are there to help them, not necessarily to make the sale. So yeah, even in the quest of value selling, we still have to be true and authentic. But we have to do our homework. We have to still try hard to find that value.

Jeff White: And it really can’t exist on false pretenses.

Neelam Kumar: Absolutely.

Carman Pirie: As we draw our time together to a close, I’m wondering if you would think about your work and instilling a value-selling mindset in manufacturing industrial enterprise. If you had to pick the single biggest challenge that somebody doing this will encounter, I wonder what it is and how you would recommend they overcome it.

Neelam Kumar: Yes. I mean, in my experience, you know, internally I have seen the challenge being to, you know, internally evangelize the approach, especially when you’re dealing with sales teams that are very mature, sales teams that are set in their ways and sales teams that very heavily rely on relationships and that kind of blindsides you from looking outside of that relationship and looking at your customer as a company that is there to benefit their shareholders. That’s the that’s the end goal of a company. Relationships are all good, but any corporation’s end goal, for better or for worse, is to increase their shareholder’s value and oftentimes get blindsided by relationships. So if we can help, the biggest challenge going back to your question is to help our teams look beyond just relationships and think about how our product adds value to their shareholders.

Carman Pirie: Yeah, I think that that really resonates with me. And I just I’ve really enjoyed this. Thank you so much.

Neelam Kumar: I have to and I appreciate this opportunity to talk about this topic. Thank you for all the good questions.

Jeff White: Thank you, Neelam.

Neelam Kumar: Thank you both.
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