Author: Mark Cotgrove | Reading Time: 6-7 minutes
You may consider this to be a simple question of semantics. Or, perhaps more a question of Calculus. But you’d be wrong on both counts.
Why does it matter?
There is a lot of talk in the sales world about “differentiating” when it applies to your product, your service and your company, but how many people really know what that means? It’s my observation that far too many sales and marketing organisations mainly talk about “differences” when they think they’re describing differentiation.
They talk of features and benefits and how their stuff is better (because it’s different from the competition). Sales people are drilled in the art of benefit speak and to avoid merely repeating the features of their product in front of the customer. They are then let loose on the world believing they are differentiated when they are simply no better than being different.
So, if you were selling swans do you think that your black swans are just different from the other white swans because they are black or are there other more compelling aspects that differentiate them? Hold that thought.
Firstly, let’s examine why Value Proposition differentiation is so important. Then we will ‘dive deeper’ into what it really is, and how you achieve it.
Let’s suppose you are in a B2B sales team in a market where you have a number of competitors with broadly similar offerings. A customer seeking to fix the problem you solve has a choice of perhaps 4 or 5 suppliers. You have identified a new opportunity in one such business – so naturally you must expect that the customer has also identified multiple potential suppliers – your competitors. This is what we refer to as a “Value Added” sale which in turn means you have identified the customer’s buying style as one that requires this approach, and you have aligned yourself to it.
You must now start and keep addressing two fundamental questions all the way through the sales and buying cycle:
- Do we have a real opportunity? (i.e. qualification)
- Can we win it? (i.e. differentiation)
We’ll focus solely on the second one here, but in real life, the two are inseparable. Let’s answer the question posed in the title of the article.
Value Proposition differentiation vs merely being different?
At the most basic level, a “difference” is all about the product or service. And within those, it is also all about features. Features of products or services from different suppliers are different and this is perceived in many sales approaches as being sufficient to win. That is a misguided notion because it relies on the customer being able to
- distinguish those differences and
- working out how they impact his business
In other words, what value they will derive and what is the better outcome that this will help them achieve?
The more experienced salespeople have learned about benefits as well and talk with great enthusiasm about them to customers. But a benefit is only something the product does for the customer rather than an intrinsic attribute it possesses. You might say, for example, our product will save you money** and call that out as a benefit to the customer. However, the next product they look at may well also make the same claim. The customer can see as well that the products are different (maybe one is black and the other white as with the swans) but which one is better for their situation? Which one gives the customer a better outcome?
This is where we step up to differentiation. Differences in features and benefits relate to the product whereas Value Proposition differentiation relates to a better outcome for the customer. Which one do you think the customer cares about more?
How do you truly differentiate your Value Proposition?
For our offering to be truly differentiated, it has to show how it delivers a better business outcome for the customer. You have to relate its features (small, powerful, quiet etc) to the benefits for the customer (lower operating cost, more reliable) to the business outcome this provides (faster response times and greater uptime for their customers for example).
The outcomes are all measurable and exist in the context of the business issue or problem we believe the customer understands. Everything else is only really relevant to the supplier. Your customer doesn’t relate to the features or benefits of your product until we have demonstrated we can help him create a better business outcome. In other words, we have differentiated ourselves – as opposed to just appearing different.
This is absolutely central to everything we do because of that word “Value” which appears in every situation we help our customers deal with. Customers don’t buy features and benefits – they buy OUTCOMES which drive their business forward and upward.
For us to win their business we have to show that our outcome is better for the customer – in other words, it is differentiated.
To help you visualise what this really means, you need to find the point in every sales situation where the supplier simply has to understand what the solution looks like from the customer’s perspective. Does their vision of this solution match what you can offer? If it does, then you have reached a key point where you can converge your solution with the customer’s problem.
And coming back to our black swans you might want to differentiate them possibly as being rarer, having different origins to their white cousins, more beautiful with snakelike black necks, gleaming red eyes and candy-red beaks. But as you can now see this will depend on what is important to your customer. So you will need to make sure that these attributes have value to your customer and fit well with their vision.
Understand the customer’s vision
If they have a very different vision of the solution however, you need to go back and revisit it until you have sufficient understanding. Should you realise that their vision doesn’t match yours, then your opportunity isn’t going to happen unless you gain a better understanding. A competitive solution will be selected instead because it does match what the customer has in mind and is therefore differentiated from your proposal. They win, you lose.
But by identifying how your solution is differentiated you then have an opportunity you can win. If you cannot differentiate your solution in the customer’s eyes then it is down to a roll of the dice whether you will win the business against your competitors or not. Probably not. The real professional salesperson is working towards this point from the very start of the sales engagement and makes sure they are always differentiated by the outcome, not just by the features or even the benefits.
** This is classic sales talk but it is wrong. Remember that any “benefit” that does not have a relevant business metric to support it is just an opinion. Metrics are what count in successful business, not the opinions of misguided product suppliers.