The effect of value-based selling activities on sales success
School of Business | Master's thesis
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AbstractValue-based selling and its key methods have been characterized as an effective way of selling in the existing literature. This is assumed to be due to the fact that an explicit indication of value makes customer's purchase decision easier because the investment can be reasoned with rational arguments. Typical value-based selling tools are value calculators and reference cases. However, regardless of the strong theoretical support for the effectiveness of value-based selling, no research thus far has empirically and with actual sales data examined what kind of effects valuebased selling activities have on sales success. These effects are studied by using sales data of a B2B company operating in marketing services business. Value-based selling activities studied are the use of value calculators and reference cases, and the data was collected from an electronic sales meeting platform as well as from a CRM system. Hypotheses are tested with quantitative analyses on a sales meeting level. Findings show little support for value-based selling's hyped effectiveness as a sales method. Main findings show that using a value calculator decreases the duration of sales process. However, the results also show that using a value calculator does not affect the probability of a sales deal - the customer's purchase decision was thus independent from seeing a value calculation of the offer. Findings also suggest that the higher the value of a sales offer, the less likely it is that a value calculator is used suggesting that the use of a value calculator does not depend on the customer's preferences or purchase style but on the sold offer. The study suggests that value-based selling methods are not suitable in all kinds of business environment and for all kinds of products or services, or at least companies should not count on their effectiveness. If value-based selling methods are ineffective, more simplified sales pitches or more emotionally-laden sales arguments could be justified to achieve better sales outcome.
value-based selling, sales process, value communication, value justification