Value creation goes hand-in-hand with competitive differentiation.
You can’t easily have one without the other.
But competitive differentiation is increasingly difficult to achieve and communicate. Strong corporate brands aside, buyers think of similar products and companies as largely the same.
What is competitive differentiation?
Competitive differentiation simply means a company and/or its products are different in some meaningful way from similar companies and products. The strategies used to achieve competitive differentiation include pricing, features, quality, selection, design, target market and more.
Being different isn’t enough. Differentiation is only half the aim. Choosing the differences that will make a company and its products competitive is the real objective. That requires knowing what buyers value and then marketing to showcase how your differences deliver what is valued. Sellers must also be clear on the various ways their products are different. Sellers must know how to position differences to show, add and create value for each unique buyer.
It is more difficult to do this now than it was even a decade ago. True differentiation is not only more challenging to achieve, it is also more difficult to convey. Buyers, thanks to the broad access they have online to many other sellers, view products as commodities – as if one is just as good as the next.
At the same time, both buyers and sellers are busy. Both may overlook the need to talk about what makes a product or service different from all the similar ones available. Worse yet, many sellers have never even thought about this and cannot effectively answer the question “why should a buyer choose your product over a competitor’s?”
Additionally, the needs assessment phase of a sales process is frequently shortcut as sellers race ahead to propose a solution. Without probing to understand what a buyer values, the best competitive differentiation the seller can offer remains generic and may be of low or no value to a particular buyer.
When all this is added together, the outcome is not surprising. But it is problematic for companies that need to maintain and grow market share. Without clear competitive differentiation, sales will not be as strong as they otherwise would be. Without clear competitive differentiation, over time a brand or company can become misunderstood, unappreciated and devalued.
Who is responsible for competitive differentiation?
Competitive differentiation is the responsibility of both the marketing department and the sales force. Ideally, there would be a cohesive message about what’s different and why it matters to buyers. Marketing would promote those differences and would innovate and continually strive to keep products aligned with consumer demands. Sellers would build on these strategies to make the competitively differentiated features apparent to buyers. They would selectively present the ones which are most appealing to each buyer in a way that resonates with the individual buyer’s primary value.
This doesn’t always happen. When it does happen, sales grow. When it doesn’t happen, sellers have to work even harder to retain each customer’s business and to appeal to new prospects. Without clear competitive differentiation of products or brand, the seller must take an additional step.
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Deb Calvert, “DISCOVER Questions® Get You Connected” author and Top 50 Sales Influencer, is President of People First Productivity Solutions, a UC Berkeley instructor, and a former Sales/Training Director of a Fortune 500 media company. She speaks and writes about the Stop Selling & Start Leading movement and offers sales training, coaching and consulting as well as leadership development programs. She is certified as an executive and sales coach by the ICF and is a Certified Master of The Leadership Challenge®. Deb has worked in every sector and in 14 countries to build leadership capacity, team effectiveness and sales productivity with a “people first” approach.