Subscribe
Subscribe via Social
Differentiation Is Not Enough
Let’s be honest. While you may provide your customers with the “best” option, the reality is that they have more than enough adequate options. I put best in quotes, because today being the “best” in not enough to win.
Think about this:
- I think Diet Coke is the best soda, but I’m okay with Diet Pepsi.
- UPS is my choice for overnight delivery, but I’m okay with Fedex.
- Starbucks is my favorite coffee, but Myorga Coffee is just fine with me.
If your product or service is merely the best among adequate choices, your market position is precarious. You’ll have to work harder and harder, for less and less – just like everybody else.
By the way, differentiation is no longer enough – to succeed in the future you must radically differentiate yourself. You must become a market of one. For example, we’re working with a company that provides strategic planning for a tightly defined vertical market. When we started working with them, their objective was to communicate how their strategic planning process is the best. Our advice was that if we focus the conversation on strategic planning, we lose. As long as their prospects can compare them to other strategic planners, there was no way to differentiate adequacy.
What we had to do was identify where and how we could become indispensable. We had to identify the problems that weren’t being solved by traditional strategic planning, and focus the message, the approach, and the process to solving those problems. This required us to more tightly define their market, to probe deeply into the results their clients desired, and to develop the tools to have the “what’s it worth conversation.”
The same is true for you. Stop asking yourself, “What can we do to be the best?” Instead, focus – maniacally – on where and how you can be indispensable.
Are You Excited?!
On the advice of a client, I’ve started reading Peter Schutz’s The Driving Force: Getting Extraordinary Results with Ordinary People. Schutz was the CEO responsible for turning Porsche around.
Tell me, what is happening at Porsche today that is so exciting that you can hardly wait to run and tell our customers and dealers about it?
What a powerful question! What are you excited about?
Getting Past Awkward
Interlock the fingers of your two hands together. Look down to see which fingers are on top – your right or your left.
Now switch them, so if you if the pattern of your thumb and fingers is left, right, left, right, etc. you change to right, left, right, left, etc. Keep them like this for at least 30 seconds.
How did if feel? My bet is it felt pretty awkward, initially but the longer your fingers were in the new position the more normal it felt. If you practiced this exercise a couple of times, you’d be able to go with either configuration without a thought.
This is a typical exercise used to demonstrate that change, initially, feels out of place, and relatively quickly becomes normal.
I write a lot about focusing on the results your customers desire and on asking the difficult questions that provoke the awareness of gaps in performance that you may be able to fill. Recently I was sharing this approach – what we call Diagnostic Protocol – with a client.
The CEO shared with me that while he thought the questions we were developing were excellent, asking them in conversation felt quite awkward – even to him. His feeling is quite normal, and it’s the reason that many sales teams fully capable of becoming Demand Creators fail to do so and remain Commoditizers or Peddlers.
There are two types of questions you can ask in a sales interaction:
- Questions that your customer/prospect readily knows the answer to – these questions are designed to educate the salesperson and as such create no value whatsoever in the sales process and position you as a Peddler.
- Questions that force your customer/prospect to think and consider because they don’t know the answer – these questions are designed to educate the customer/prospect (as well as the salesperson) and as such are the only types of questions that can create any value and separate your from the Peddlers and Commoditizers.
The challenge with this second type of question is:
- They can make the customer uncomfortable
- They require the salesperson to be more prepared
- They’re different than the typical questions most salespeople ask, so it can feel awkward
However, just like changes to which hand is on top, the more frequently you ask these types of questions the more comfortable and valuable you will be.
Solutions Are Worth Nothing
If you’re a long-time
reader of this blog, you know that I’ve talked a lot about the need to monetize the value of what you do. In today’s Drought, merely talking about benefits is not enough to drive successful results.
I’m working with a great company in the Southeast who has taken this idea and is literally changing their entire approach to selling. Recently, they sent me a list of programs and processes they offer to their clients. These programs and processes are what makes their company a superior solution. They were developing a worksheet to show to their prospects the value of each program rather than spouting the features and benefits.
It is here where Diagnostic Selling completely separates itself from traditional solutions-oriented sales. In Diagnostic Selling, there is a key principle that you must keep in the forefront of your mind at all times:
Solutions Have No Value
A solution isn’t worth anything – unless it addresses is a specific problem for a specific customer. Think about it, what’s a computer worth? It’s not worth anything if you don’t need one.
As I’ve discussed in several recent posts, you are always in one of two conversations – either “What’s it cost,” or “What’s it worth?” When you focus on the solution, you cannot escape the “What’s it cost” conversation.
Therefore, the goal of your sales and marketing efforts should not be to value the solution, but to enable you prospects and customers to identify, understand, and value their problems. When you do that your solution becomes far more valuable.
3 Steps to Superior Performance
I had a very interesting conversation with a CEO attendee at one of my speeches. He’s built an impressive organization and he was sharing his management philosophy.
Basically, he believes that his most important job is to hire great people, which he defines as people clearly capable of doing the job assigned to them. His second most important job is to clearly lay out the results he expects. His third (and probably toughest) is to get out of the way and let his people go to work.
I realize that there is nothing earth shattering in this philosophy. What struck me is how matter of fact he was in discussing it, and the track record he had implementing it.
I often talk about how effective communication is not communicating so you can be understood, it’s communicating so you can’t be misunderstood. In my conversation with this CEO, I realized just how important this type of communication is, in a world that moves and changes so fast.
I’ve done a great job of assembling a unique group of people and talent at Imagine. My job now is to raise the bar on my communication so that I can get out of their way.
What do you have to do to drive better performance from your people?
Fridays With Vistage
Many of you know that I regularly speak to Vistage groups around the country. For me, it’s a great opportunity to go into depth with groups of forwarding thinking CEOs about how to position their businesses to enjoy disproportionate rewards.
Join me on Friday, May 21st from 2pm to 3ppm EDT, as I share 3 critical secrets that will enable you to increase your sales, shorten your sales cycle and expand your margins – in any market condition.
Key takeaways:
- Define your core market to earn premium margins.
- Provoke awareness and move from being a discretionary purchase to an indispensable one.
- Monetize the sales process by building Cash Flow Farms™.
You can register by clicking here.
Promise, Pitch & Pray
Increasingly, over the last twenty years “Promise, Pitch & Pray,” has become the battle cry of the sales profession. And, while I’ve never embraced that approach, in all honesty that’s probably all you needed to do to be successful in sales five to ten years ago.
For most of the last 20 years, you only needed to do three things well to succeed in sales:
- Make a strong clear promise
- Present the promise well
- Be likeable
However, as the complexity and pressures of business have increased the demands on salespeople have ratcheted up exponentially. In an “copy-cat” markets, where buyers don’t fully understand their problems, making a promise is not enough.
To be successful today, you must – MUST – become a resource for your customers and prospects. You must position yourself in a way that allows you to enter “sales” conversations before there is anything to buy.
In a world where every competitor makes a strong promise, merely promising is not enough. To succeed today and in the future, the only difference that matters lies in now you to go-to-market and how you sell. Invest in the capabilities of your salespeople to run them into “businesspeople who sell,” and you will build the unfair competitive advantage you need.
Growth Barrier 2: Focus On Margin Growth
In my first Growth Barriers post, I discussed how your competition is irrelevant and how to tell if you’ve bypassed your competition. Today, I’m going to address Growth Barrier 2:
Our growth rate is accelerating and our profit per sale is increasing
I often caution selling organizations: just because the fish are jumping in your boat, doesn’t mean that you’re an expert fisherman. For most of the last 20 years, demand was growing so fast that businesses could fool themselves into thinking they were smart, even when they were doing dumb things (pointing out another word of advice: Never confuse brains with a bull market).
While economic and market conditions determine the fate of the vast majority of companies, there are always a few that are able to grow – and grow profitably – in virtually any market condition. The critical commonality of these companies is maniacal ability to focus, and stay focused, on their core business; rather than being distracted by what seems to be low hanging fruit.
These companies know where they can be indispensable, and they allocate disproportionate resources to growing in those areas. Because of this focus they are able to move beyond price as three powerful things occur:
- They get more for their products and services,
- It costs them less to sell their products and services,
- They grow faster while enhancing their margins.
Now rate yourself on a scale of 1 – 10, where 1 would mean there is tremendous negative pressure on both your revenue and your margins, and 10 would indicate significant strength in this area. With your rating clear, start brainstorming with your team things you can do to better focus on the areas where you can grow both revenue and margins.
I’d love it if you shared some of your thoughts in the comments.
Growth Barrier 1: Bypassing Your Competition
Several years ago, I created a tool to identify how well a company is positioned to successfully identify, capture, manage, and absorb profitable growth opportunities. I called this tool The Growth Barriers Diagnostic™ (you can take the diagnostic here if you’d like).
While the tool was created a few years before the “great recession,” it’s been equally effective in diagnosing growth barriers since. Last week, I had a deep conversation about the content of the diagnostic and what it means with a fellow CEO. I hadn’t discussed the diagnostic is such depth since it was created, and it reminded just how valuable the tool is.
I wanted to share some of the observations from my conversation, so today I begin a series posts that will focus on each of the 10 points in the diagnostic. Today’s focus:
I have bypassed my competition
One of the biggest flaws of modern day sales and marketing is that it causes business executives to view the world from a competitive perspective. I’ve always felt that great businesses (and going forward “great” is no longer a choice) became great because they ignore their competition. They use the energy that others lock up studying the competition to understand their best markets better than anyone.
If you think of companies like Apple, Starbucks (in its great days), or Cirque Du Soliel, you quickly realize they wouldn’t exist if they had focused on “differentiating their offerings” rather than delighting their best customers.
Two weeks ago, I wrote about The Shift sellers need to make to avoid being commoditized. The final shift occurs when sellers realize they sell results, and further they position their offerings so that customers look at it the same way.
When your customers view you and your offerings as critical to their results, you become indispensable and competition becomes irrelevant. When this occurs, you are able to enter sales cycles far earlier in the process (before competitors have a chance) and price stops being a driving factor in the purchasing decision.
As a matter of fact, you know you’ve bypassed your competition when you enter potential sales conversations before the customer fully understands what their problems are, or what solutions they desire. The customer relies on your deep understanding of them, their issues and your area of expertise to help them both define the problem and determine how to best solve the problem.
Now, score yourself on a scale of 1 – 10 (1 being that you are fighting the “commodity battle” virtually every time and 10 being that the scenario I’ve just described occurs 80% or more of the time). What can you do to move your score towards 10?
Leaning Forward
For those that don’t know me well, I’m actively involved in coaching my 12-year-old son’s baseball teams (yes, plural). This weekend, my son’s travel team was playing and I kept telling the boys to field the ball “leaning forward” to “keep the ball in front of them.” In this case, a couple of the boys were not leaning forward and when they didn’t field the ball cleanly, the ball continued on its path and the opposing team got on base and scored runs as a result.
I regularly tell the boys that they don’t need to field the ball cleanly to get an out. The key is to keep the ball in front of you. When you do that, you typically still have the time to get an out. As I was debriefing the game with the other coaches, I realized how much the concept of “Leaning Forward” applies to business – especially in difficult markets.
The tougher business is, the more we put pressure on ourselves to be perfect. We try to get sales opportunities to their ideal state, we worry about losing opportunities (even when we don’t really have them). The result of this is that we begin to play the game of business on our “mental heels,” leaning back if you will.
Then when something unexpected happens, we’re not in the position to keep the opportunity in front of us, to recover, and ultimately to capture the opportunity. So, this morning I give you the advice I gave my son’s teams:
Stay aggressive, lean forward, and keep those opportunities in front of you.
-
Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
