The Day Value-Added Selling Died!

Did you hear? Value-added selling is dead — dead as a doornail, deader than dirt and colder than a corpse. I know what you're thinking. I, too, once considered myself to be a value-add seller. As a matter of fact, I was a walking and talking value-add machine. I went so far as to give awards to the employee who went the furthest “above and beyond” to help a customer. For our ragtag little team, no customer request was too great. If the customer wanted our stuff delivered in a plastic tote, we complied. When they asked us to put it on their shelf, we did it. When they needed safety training at a couple of accounts, we found an expert for them.

“Value-add” was my middle name. But now, value-added selling is dead. And, I fear that if you are one of those folks who doesn't realize it, you may soon follow value-add to the grave. Let me explain why. Most knowledge-based distributors are intrinsic providers of value. Rather than just shuffle commodity products from Point A to Point B, most of us combine application expertise, troubleshooting skills and other valuable tidbits with everything we sell. We don't just sell widgets. We used to call all of these human-factor things our “value-adds.”

Our customers have grown to depend on our value-adds. Many organizations have eliminated entire departments or scaled back to a mere shadow of their former state. And as the baby boomer generation nears retirement, millions of years of application experience are shuffling out the door. Not only do customers need our expert guidance, they will need it in larger doses in the very near future. So far, all of this probably sounds like a good thing, but it's not.

The term value-add has become a hackneyed phrase. Today, everybody claims to be a value-added supplier. Let's test this theory. When was the last time you heard someone say they don't add value? How about salespeople? When was the last time one of your competitors said, “Don't ask me, I only take orders?” In literally thousands of interviews with wholesale distributors, not one has ever told me he picks up his customer service reps downtown right behind the mission after breakfast every morning. I coldheartedly decided value-add was dead when a late night kitchen gizmo infomercial devoted 30 seconds to extolling their special — you got it “value-add.”

To make matters worse, our friends over on the purchasing side have discovered value-add, too. They've learned to beat down our value-adding sales techniques by repeating this phrase:

“Of course you add value, all of our suppliers do. That's why you're here. But I want to work with you to help sharpen your pencil and provide us with some good, solid cost savings — in the form of price decreases.”

Your value is discounted, decreased, commoditized, stapled, folded and mutilated.

Still not convinced? In spite of 20-plus years of singing the partnership song, many purchasing organizations still lack compensation for their ability to drive year-over-year price decreases. Your service doesn't count in this equation. At least your value doesn't pay for their kid's braces or their family outing to Keokuk.

If all of this sounds a bit gloomy, don't be disheartened. As they said in days of old before distributors were invented, the King is dead; long live the King. While value-added selling is in fact deceased, a young squire stands ready to improve our world. And the bloodline is pure. Long live value-metric selling. Let me introduce you.

The young scion resembles his forefathers in many respects. Knowledge-based distributors produce value by the bucket load. Product specialists, application engineers and technically competent sellers have a hard time not generating value. Wherever they pass, they leave a massive wave of value in their wake. And herein lies the problem. It's often indiscriminately applied value.