Value Add Versus Sales Incentive: An Important Distinction

In the world of sales, the concepts of “value add” and “sales incentive” are often tangled up and overlapping.  Both can lead to differentiation, but in very different forms and levels of impact.  Both are important to winning deals, especially when they are effectively combined into a single offering.  

Products can and should have value-added features that lead to better outcomes, improved performance, and enhanced financial or operational impact.  That’s what makes one product or offer stand out from another and can lead to why a purchaser selects one offering over another.  However, the concept of value add within the actual sales proposal is generally sales incentives in sheep’s clothing.  

Assume for a moment, that the products being included in the proposal will meet the prospect’s minimum viability requirements.  They may even exceed the minimum viability requirements by being less expensive than their competitor’s solution, offering more features, or help drive better operational efficiency than someone else’s offering.  

These are primary examples of ‘value add’ from a product or offering perspective.  The characteristics are what got the company and the product into consideration in the first place – and they may be enough to carry the day and win the deal.  But, they may not.  

Differentiation is becoming more and more of a challenge as products become more commoditized and solutions start to overlap and blend into one big group of offerings that will do what the prospect needs, but not necessarily, clearly stand out on their own in a crowded marketplace and industry.  

So, how does a sales team create the momentum to get their product to the front of the pack?  They package up their product or offering into a compelling sales proposal with sales incentives to add back or create new differentiation from their competitor’s proposals.  These incentives are just that, they are designed to ‘move the needle and help their product or offer stand out.  They aren’t specifically value adds by themselves because they are singular in focus and narrow in impact.  

Sales incentives are built for a single transaction or pursuit and don’t extend much beyond that specific opportunity.  Sales incentives like a discount, better terms, and conditions, or a rebate.  While enticing, they benefit both the buyer and the seller, but just in the form of securing a singular transaction.  

Let’s look at some traditional ways to incent buyers to purchase your product, starting with discounts.  Price is a powerful motivator, but it isn’t always the reason you win or lose a deal.  It’s a factor, in every instance, but it is just a factor.  One of the challenges with discounts is they are imprecise.  How do you know that the discount you applied actually moved the needle?  Did you leave money on the table?  

Another challenge is you just set a precedent in this account for what you value your product at, not necessarily at what your prospect or customer values it at.  You can increase the impact of your discount by making it bigger, but that eats into your profit and may or may not make the account sustainable in the long term.  Winning on price as the primary driver can and does devalue your product ‘value adds’, it is nearly impossible to put that genie back in the bottle once you’ve pulled the price lever, especially if you pulled it really hard.  

Another incentive is terms and conditions, like free shipping or 90 days to pay.  These are easier for your customer to quantify, but still imprecise for creating differentiation.  If cash flow is impeding your deal, being able to be creative in how you charge your customer and when can demonstrate creativity and a willingness to problem solve with your customer, but they also set the precedent that may or may not be sustainable or valuable to the client in the long term.  Terms and conditions are impacting for that transaction or deal, but don’t demonstrate wider value for your product offering in the long term.  

Your product or offer is at the very center of everything you do.  You’ve developed it and iterated on it over time-based on valuable customer feedback and sometimes through what you learn when you don’t win the deal.  Your product’s ‘value adds’ are well documented in how you position your offering and communicate value to your prospect or customer.  

What if you could combine these ‘value adds’ into a more compelling proposal that not only creates differentiation for your product but also makes your proposal stand out in a crowded field of competitors?  So, combine the power of your product or offering with an equally powerful proposal with actual differentiation in the proposal itself.  

At ScaleWith, we are helping our customers create a whole new way to sell and deliver on a value add within the framework or very fabric of the sales proposal itself.  

We are creating a third, macro-level lever for you to pull in winning new business and creating differentiation for your product and your company – with the objective to win more business in a sustainable, broader sense that communicates value beyond just a single transaction.  

Combine the power and value add of your product with the incentives that make sense for the transaction at hand and then add the third level, embedded Social Impact as part of the fabric of your proposal.  This includes crafting a signature value prop to distinguish yourself from your competitors by telling the right story.

A proposal that tells the right story has three fundamental ingredients, a unique product, sales incentives like price and creative Ts&Cs, and using the power of ScaleWith, adding curated, Social Impact catered to your client.  These factors combine to extend your proposal beyond sales and procurement teams but help your proposal become an operational tool to work with your customers to help make the world a better place. 

Incorporating Social Impact into sales renewals or new proposals strengthens relationships and differentiates sales teams from other potential suppliers. This innovative way for companies to come together to collaborate on critical Social Impact projects benefit their companies, their communities, and their respective stakeholders. 

While the two concepts may differ, creating additional value for your customers and incentivizing new logos are both effective new ways to garnish new pursuits. Here at ScaleWith, we’re excited to help provide you with both. 

If you’re interested in learning more about ScaleWith, set up a demo today.