Selling Differentiated Value
By: Don Hutson

While things 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 unanticipated problems.

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.

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