Selling Differentiated Value
By: Don Hutson
are apparently turning better, markets for most products and
services seem to be rather tight. As we look at probable future
challenges, I feel comfortable with the following predictions:
competition will get keener; decision makers will become sharper and
more discriminating; and margin pressure will continue to impact our
profitability. As we go forward, it will be necessary for us to
carefully and strategically sort out our options as to how we go to
market. How we address the issues of discounting, taking our
creative selling efforts to new levels and maintaining our position
as viable and profitable organizations, must be a high priority.
I am often asked if I would rather be selling a product of the
highest quality and offering the best service at an upper level
price or selling a product of marginal quality with mediocre service
at a much lower price. I will take the former over the latter every
time. People are more willing to pay for quality than they have ever
been. They just are not willing to endure the hassle that goes along
with the compromises in quality and service. It is easier to explain
price once than to apologize for quality endlessly.
In our attempts to assess the mindset of today's buyers, we find
that people in practically every industry want problem-free products
and services that do the job for them without requiring additional
time and money to solve quality problems. You are usually dealing
with sophisticated buyers who know the significant cost of
There are six types of differentiation we should be aware of:
product, price, relationship, service, process, and technological.
Let's take a look at each.
1. Product Uniqueness is important, whether tangible or intangible.
When you have a product that others can't offer that has substantive
desirability and features, no competitor can underbid you!
2. Price Differentiation is for those who consciously choose to go
to market as the "price leader", or those who are simply unable to
come up with other genuine differentiators. Discounting compromises
your margin and ultimately, your profitability, so go there last, if
you must go at all.
3. Relationship Differentiation is simply being a more desirable
person to do business with than your competitors. We should never
underestimate the power of extraordinary people skills and friendly,
high integrity behavior. If two people really want to do business
together, the details probably won't get in the way. If either one
doesn't want to do business with the other, the details probably
won't make it happen!
4. Service Differentiation is among the most powerful today because
people will do almost anything to avoid hassle and inconvenience.
Get in your customers' faces and serve them to death! Don't give
away your margin....give away your heart through extraordinary
service and simple caring and you will be valued and remembered.
5. Process Differentiation can offer its own uniqueness. How can you
make your process of doing business more appealing to your customer?
Perhaps it is invoicing them the special way they want, or shipping
in a manner that meets their needs and budget, though it varies from
the norm for your industry. Be willing and able to turn on a dime
for your customer to gain this advantage.
6. Technological Support can be a great high tech differentiator. It
is anything that you or your firm can offer that includes
technological advancements that your customers desire. Think "out of
the box" with your associates, ask customers what they want and
need, and come up with some advanced, non-traditional high tech
approaches. If you do this better than your competitors, you will
have an edge.
The weaker we are at offering differentiated value components, the
more we must rely on price appeal. If you have no differentiators,
you are essentially offering a commodity in which case price is
everything. Try not to go there. Protect your margin or you will be
mortgaging your future!
- Copyright © 2003 by Don Hutson. All rights reserved.