"How do you create a perceived value to differentiate yourself
from the competition, when you are both selling a commodity?"
That's a question I'm often asked in my seminars. It uncovers a
problem that is spreading to almost every industry. The rapid
pace of technological development and our ultra-competitive
global economy means that no one can keep a competitive edge in
their product for very long. Develop a hot new product or
service, and before you can take your first check to the bank,
a competitor has a hotter or cheaper version. As a result,
customers are more and more inclined to view your product or
service as a commodity - no real difference between you and the
next guy.
This complicates life for the salesperson. In some cases, you are
selling exactly the same thing as your competitor. I spent a
number of years selling for a distributor who sold, for the most
part, exactly the same products as four or five competitors. Many
of my clients work in this arena. Lumber distributors (a piece of
lumber is a piece of lumber), industrial fasteners (a screw is a
screw is a screw), petroleum (87 octane gasoline is 87 octane
gasoline) etc. The list goes on and on.
In other cases, your product may not be exactly the same, but
the customer views your product as a commodity with no real
differences between what you sell and what your competitor
offers. How much real difference is there between Coke and Pepsi
after all?
Regardless of the situation in which you find yourself, the
problem for the salesperson is the same - getting the business in
the face of the customer's perception of your "me too" product or
service.
So, what do you do? This. To put it simply, you must detail and
communicate the important ways your offering differs from your
competitors.
That's easier said then done. To do so effectively, you need to
spend some time thinking and preparing. And that means that you
must carefully consider the two most important elements of the
sale - your offering, and your customer. In this column, we're
going to focus on one part of that equation - your offering.
Granted, your product may be exactly the same as the competition,
but the totality of your offering may be dramatically different.
I use the word "offering" to indicate every aspect of the
purchasing decision - not just the product. For example, the
customer buys the product from a company - yours or the other
guys. The customer buys it from a salesperson - you or the
competitor. Your company and you are part of the "offering." In
addition, there may be differences in your terms, delivery, your
customer-service capabilities, your follow-up, your return
policy, your value-added services, etc. All of these are part
of your "offering."
The product may be identical, but everything else about your
offering may be different. For example, let's say you are
contemplating purchasing a new Taurus. You have identical price
quotes from two dealers. The product is the same, and the price
is the same. However, one dealer is close by, the other across
town. One dealer has a reputation for great customer service;
the other has no such reputation. The salesperson for the first
dealer is the brother of an old high-school friend, while the
salesperson for the second dealer is a bit cocky and pushy. The
first dealer has a clean, comfortable establishment, while the
second one is cramped, cluttered and dirty.
From whom do you buy your Taurus? Stupid question. Of course you
buy it from the first dealer. Not because of any differences in
the product or the price, but because of differences in the
offering. Got the idea? There is a whole lot more to a decision
to buy then just the product or the price.
Your first job is to identify those differences. Here are some
very specific steps you can take today.
ONE: Think about everything that is associated with the product
when a customer purchases it. Create several categories, and
label columns on a piece of paper with the names of those
categories. For example, the first column could be headed with
the word "company," the second with the word "salesperson," the
third with "terms." Continue in this way, identifying every
aspect of the offering and placing each of those components at
the top of a column.
TWO: Now, consider each column one at a time, and list all the
ways that your offering differs from your competitor's in that
column. For example, your company may be locally owned as opposed
to your competitor's branch of a national company. Or you may be
physically closer to the customer, or larger, smaller, newer,
older, etc. After you've exhausted one column, move onto the
others, filling in the details as you go.
THREE: This exercise will typically reveal dozens (and in some
cases hundreds,) of specific, detailed differences. Far too many
than you can easily communicate to the customer. So, your next
step is to pick out those differences that are most important to
your customer. Keep in mind that often what you see as important
may not be viewed that way by your customers.
At one point in my career, I worked for a company that celebrated
its 100th year anniversary. That was unusual. No other
competitors had been in business nearly that long. The company
decided to make a big deal about it. A history of the company was
written, brochures printed, even murals depicting significant
moments in the company's history were painted on the walls of the
corporate office. We all thought it was important.
Our customers, however, didn't care. After respectfully listening
to our boasting, their response was some form of "So what?" In
other words, our 100 years didn't mean anything to them. In no
way did it make their jobs easier, simplify their lives, or make
them more important to their companies. What we thought was
important turned out to be irrelevant from our customers´
perspective.
Don't make the mistake we made. Instead, take the time to
critically analyze your list, and eliminate those items that are
not important to your customer, that don't impact their jobs or
make a difference to them. You should be left with a handful of
items.
FOUR: One more step to the preparation. Translate each of those
items into statements of benefit to the customer. For example,
your company may be local, while your competitor ships from 50
miles away. So what? What does that mean to your customer? You
could translate that item of difference into a benefit by saying
something like this: "As opposed to some other suppliers, we're
just 15 minutes from your plant. This means that you can get
quick delivery of emergency shipments, as well as rapid response
to any problem that might develop. So, you'll have potentially
less downtime in the plant, and of course, less stress and
pressure on you."
Now that you've professionally prepared, you are ready to
communicate those differences to your customer. You need to point
them out in an organized and persuasive presentation.
Prepare a sell sheet with each of the differences noted as a
bullet. Next to each bullet, have a few comments that capsulize
the benefit statements you prepared. Then, meet with your
customer, lay the sheet down in front of him/her, and talk down
through it, explaining each point as you go.
Treat it like you would any other well-done presentation. Be
sensitive to your customer's reaction, and ask for feedback as
you work down through the list. Say, "How does that sound?" or
"Does that make sense to you?" and emphasize those things that
seem to be more important to your customer. Then, leave that
sheet with your customer.
I'm always amazed at the number of salespeople who are confounded
over the customer's perception that their product is just like
the other guys, when those salespeople have done nothing to show
the customer how it is different.
As always, if you have done a good job of analyzing, preparing,
and communicating, your customer's perception should be altered,
and you gain the business. If you haven't done well at this, then
your customer will continue to see no difference between buying
it from you and buying from the next guy. And, if you haven't
shown him/her sufficient reason to buy it from you, then he
shouldn't.
From the customer's point of view, if your offering is just like
the competitor's, then the customer is absolutely correct in
buying from the cheaper source. However, if there is any
difference between your offering and your competitors', than the
responsibility is totally yours to show the customer that
difference. Follow the process described here, and you'll have
far fewer customers treating you like a commodity.
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