Digital transformation has positioned technology at the top for strategic corporate investments in recent years. Technology-enabled innovations are influencing the rise of new business models, that are increasing new revenue streams and reducing costs. Initiatives, such as remote working, business process automation, advanced data analytics, digital marketing and omnichannel experiences, are transforming organisations and the ways they work together, on a global scale.

Realising the great opportunities today, and still to come, software companies are fast developing state of the art solutions to meet evolving business needs. These solutions are designed to deliver customers significant positive results. Despite this, software vendors face a continuously difficult challenge: to effectively underline the business value of their solutions.

Conventionally, business value for software solutions hinges on the total cost of ownership (TCO). TCO outlines the value that the IT department – the main sales stakeholder – will benefit from directly. Such tiny perimeters to differentiate from competitors in this field, often results in lower win rates, smaller deal sizes and poor margins. 

The real value of the software solution resides in the opportunities value selling offers to realise the benefits beyond IT. Business value is evolving working relationships and conversations, bringing sales representatives and business executives closer together.

A strong, dependable value selling practice has a positive, measurable impact on sales activity. 

Are you wondering why incorporating value selling into your sales cycle could be beneficial? Here are five ways software vendors can benefit:

1. Minimise price erosion

If you can present a positive business case, you can positively shift a customer’s perspective on IT investments. It is essential to show that, from a cost centre to a profit centre, IT departments can transform and change their business paradigms. The investment will be seen from an entirely new perspective, if you can demonstrate the value of the solution, and a sufficient rate of return within the investment period. Consultations will move from costs to benefits! Customers will no longer focus questions on prices and will instead wonder how to guarantee the benefits. At this point, you are better positioned to justify your sales margins and limit price erosion. In renewals this approach is also applicable, where customers are pushing for the same type of solution to optimise budgets.

With value selling, compared to a scenario where value is not part of the sales discussion, you can assume a reduction of up to 50% for any applicable discounts.

2. Cross-sell – introduce additional capabilities

By engaging your customers in business value, you can draw links that are unjustifiable without value selling. Presenting the estimated net value for the opportunity offering, provides the space to develop the value benefits, to include additional products that work together with the opening offering. These significant opportunities to cross-sell can provide results of a 15-20% sales uplift. Value selling strengthens your position and allows you to gain a competitive advantage. 


Value management helps increasing deal size by 15% to 20% in software companies

3. Upsell – grow user demand

You can also increase upsell with value selling, focusing on the customers who want to start small and grow little-by-little. The Covid-19 pandemic has driven organisations to review their investments. It is now more important than ever for companies to prioritise investments that will capitalise on their business outcomes. To convince customers that now is the time for them to invest, it is essential to explain the value you can deliver. Customers will then clearly see that any delay in their investment is causing a delay in their value realisation.

In relation to users and licensing, explaining the value and benefits can increase volumes at deal closure. With this opening for upfront investments, phased and ramped up offerings can be put aside.  


Value management may help you speeding up decisions

4. Upsell – ascend in new business areas 

There are additional ways you can upsell. Across business segments, customers will likely have related needs. In a sales scenario where your customer has many projects in their pipeline with similar requirements, value selling is key. The total opportunity size will be spread out if multiple projects are discussed separately, and the sales cost will increase.

Business process automation, as an example, is a cross initiative that can be useful in many areas. With value discovery, you can raise interest to automate business processes across business segments. If you can explain the synergies that the aggregation of projects can achieve, you will create added value. To upsell in this way can result in a joint proposal and, either way, you will benefit by simplifying your sales cycles for comparable developments. 

5. Upsell – share business value estimates

Business power resides in local subsidiaries, which causes large organisations to have decentralised structures. It is the corporate IT sector that seeks market solutions and acts as prescriber, but the decisions get made at a local level. In this situation it can be tough to gain enough sales momentum to secure large deals. One way of achieving this is to replicate success stories of subsidiaries already consuming your services. This however takes time, with a long period between the sale and the point when your customer is set to share their success story.

Time periods are shortened dramatically with value selling. During the sales cycle you can show subsidiaries comparable business value estimates. Opportunities will then appear to start talking business parts of organisations that you would not otherwise form connections with.

Beyond deal size increase there are a few more key benefits in value selling (value engineering).

Stay tuned to our weekly blogs, to uncover more benefits value selling can bring to your business.

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