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How To Differentiate

Years ago, I worked for a start up company that carved out a niche in the electronic design automation field with a new product. As the only player in this niche it was like shooting fish in a barrel. It seemed like all I had to do was show up and demonstrate the product, then collect purchase orders. (Ok, it was tougher than that, but it was more about need creation than competitive differentiation.)

When one of the big players in the overall design automation market decided to compete with us, our general consensus was we were three years ahead of them on development, so they couldn’t be much competition. Wow, were we wrong!

One by one, all of my largest target customers started talking about the offering of this particular competitor. Not one to stand around, I did my homework on their product. “But…” I would say in my defense, “they don’t have this capability, or that capability.” Unfortunately for me, it seemed like no one was listening. I started losing orders and growing in frustration.

Then one potential buyer helped me out by accident. When he brought up the competitor’s name, I listed a number of important capabilities they were lacking. His response, “So what, why would I care about those capabilities? Their base product does everything I need, and it’s less expensive than yours.” I pointed out several problems he had identified in his current development process, then I connected those problems to my unique capabilities, challenging him to decide if he could do without solving those problems. Long story short, he bought my solution at a 50% premium over the new contender.

His basic question of why should he care, helped steer me to the most important part of the conversation; his problem set. Then it dawned on me, the key to differentiation is identifying the problem, not the capability.  I repeated this process with every new prospect and turned my win ratio dramatically in the right direction.

Coincidentally, during the same time frame, I witnessed this connection from a buyer’s perspective for myself.

On a lazy Saturday afternoon, I took my (then) four year old son along with me to run some errands. I had recently purchased a new television, and now my focus was on a surround sound system to compliment it. We stopped in the local Best Buy store, only to find too many choices. There were probably 15 different models on display. I was trying to make heads or tails of the differences by reading the summary spec sheet listed next to each one, while my son was getting antsy to leave. They had the less expensive models close the floor, with the more expensive models placed at eye level. I was bobbing up and down making notes on a piece of scratch paper, but it was too much information to process especially with my impatient son in tow.

The sales attendant stepped up to me and asked, “trying to figure out which one is the best value?” I sheepishly nodded my head, and he added, “I can help you with onequestion.”  He looked down at my son, then looked back at me. “Do you ever envision yourself entertaining guests on the patio with some nice background music, while the kids are in the family room watching TV?” I nodded in light of the obvious answer. He pointed to one system on the rack and said, “there’s only one system that will let you do both at the same time.” He got me. I walked out with the most expensive system in the store.

The lesson I learned from these two experiences is that no matter how many differentiators you have, the only ones that count are those that can be tied to problems the buyer is, or can anticipate, dealing with in their environment.

If you are a new salesperson, or you’re dealing with some formidable competition, here’s a simple exercise you can run on your own, or even better, with your whole team. Make a list of your top five differentiators for a particular product or solution. Then make a list of the customer problems each differentiated capability can address. Try to word the problems with problem sounding adjectives. Words like, “difficulty with”,  “lacking”, “frustrated by”, and the like. This will insure that you are articulating the problem and not just rephrasing the capability.

For example,

(Capability) I teach sales teams how to differentiate more effectively.

(Problems to surface) Are you having difficulty winning against lower priced competitors? Are you frustrated by your win/loss ratio in a crowded market? Are your new product introductions taking too long?

In your next discovery meeting, if the buyer doesn’t bring up the problems you’ve identified, try to surface them yourself, just like the Best Buy sales person did for me. When you get to the capabilities part of the discussion, connect each important differentiator back to a problem you discussed earlier.  I’m confident you’ll find more buyers who resonate with your differentiators.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering sales training, coaching and project oversight to improve the agility of sales teams around the world.