Chapter 3.2 Differentiation

The basis of all value propositions is that one product or solution is different in some way from the existing or alternative product or solution.

Differentiation is also the basis of competitive selling. In this book (and in my previous roles as sales manager) I mainly focus on enhancing the skills of the salesman because if you execute well and provide good service to the customer you will probably win the deal anyway as most customers experience poor selling skills and service from most salespeople, however if you master the art of differentiation you significantly improve your ability to win against good opposition.

The other “opponent” that differentiation helps you against is the Procurement or Purchasing Manager. Most organizations try to create competition between vendors for any significant purchase. The preferred approach is to make all the offers reach a threshold “it does the job”; to dismiss all differentiation and to make the vendors compete on price. So unless you want your sales career to be a series of meetings where you beg management to approve discounts, I recommend you think about differentiation.

The example of a computer server that needs less electricity is a small “difference”; whole companies have been built on differentiation. In the computer software industry one of the classic case studies would be Sybase, which was based on the differentiation of “client-server” as opposed to server based computing. Briefly the difference was a way of communication between PC based applications and the database server. This feature allowed applications to be structured and designed in a different way and (crucially) enabled a different type of application where the end user could use a PC for local processing and access data in a database on a server. So he had more “Client” power to use at his finger tips, the PC; (the alternative was a “green screen” terminal with no intelligence). Further he had the same “Server” power and was not limited to the capacity of the then very limited PC technology for his data which could reside on the server. Who benefited from this difference? A class of users called Knowledge Workers, the best example of which was traders in Investment Banking or some other electronic market. Within a few short years Sybase was the dominant database vendor in Financial Services globally and Oracle’s fastest growing and most feared competitor, approaching a billion dollars of revenues; some difference.

I was a Sales Director at Sybase at this time and I recruited a salesperson from Oracle who brought the Oracle competitive analysis of Sybase with him. I would not use it, for ethical reasons, but I could not help myself and I admit I read it. It was like looking at the world through the other end of the same binoculars. Oracle (product marketing) clearly understood the differences and their whole go-to-market strategy and sales training was a mirror image of the Sybase versions. They won their deals, we won ours. Until the market, technology and buyer needs changed and one company (Oracle) adapted and the other did not.

The pay off in developing a differentiated position is that the competitors find it more difficult to compete; it is easier to maintain your pricing; and customers who understand the value of your differentiated solution are more loyal. These are all outcomes that are worth having.

If your company’s product marketing information does not identify differentiated value from your main competitors, think it through yourself, talk to your more experienced colleagues and customers. This is an enormously valuable asset to a salesperson.

 

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About Michael

After studying Marketing at both Wollongong University and the University of Technology, Sydney, Michael Worked in B2B Marketing for the Cronulla Sharks Football Club for 3 years. Currently at CRMNow, he looks at Customer Relationship Management as a vital aspect of successful business and with a passion for Social Media and Digital Marketing he believes that all businesses have the potential to grow and remain profitable no matter the size.

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