Subscribe
Subscribe via Social
The Key to Differentiating
“That’s not how we do it in our industry.”- “I’m not sure I’m comfortable doing that, I’ve never done that before.”
- “I’ve been working with my customer for several years, and I’ve never asked those types of questions.”
- “Salespeople aren’t expected to do that in our industry.”
- “We’ve never done that before. How will I know it will work?”
These are just some of the most common statements that I hear every day from people who claim that they want to differentiate their companies from their competitors.
Let me remind everyone that differentiation is an ends – it’s not a means. The critical component to differentiating yourself in the market is doing something different that matters.
90% of the time the activity that matters and makes you different will, initially, make you and the people in your company uncomfortable. Think about it, if it were comfortable to do, it’s highly likely many others would be doing it.
Please do not misunderstand my point. Merely being different is not enough to differentiate. So, just because no one has ever done it before doesn’t mean that you should do it – but it’s a great starting point.
The Chief Reason Businesses Fail
I came across this on John Moore’s blog Brand Autopsy, I thought is was simply too good not to share:
“The single biggest reason companies fail is they overinvest in what is, as opposed to what might be.” – Gary Hamel
Spend a few minutes thinking about the implication of that! What are you doing to ensure you invest in what might be?
Freedom & Capability
I first learned of this concept from Dan Sullivan and The Strategic Coach. They taught it as a way for entrepreneurs to look at their business, and I’ve since applied it to how salespeople can position their products and services.
I have a question for you – does your product or service represent either:
- A freedom for your customer, and/or
- A capability for them?
Stop and answer these questions:
- What are my customers currently doing that my product or service frees them from doing? What impact would that have on my customer’s business/life?
- What does my product or service enable my customer to do that they are not capable of doing now? What impact would that have my customer?
The value of your offerings is limited to your ability to clearly answer these questions. When you clearly understand these answers, you can guide the conversation to clearly articulate just what you’re worth.
Why You Should Have Your Hip Replaced Now
Studies show that the healthier and stronger you are, the faster you recover from major, reconstructive surgery. Additionally, with average lifetimes increasing to record lengths, and the fact that people live more active life styles to a far, far older age than previously; it’s really not a question of “if you will need to get your hip replaced,” but rather “when will you get it replaced?”
With such evidence, clearly you should have your hip replaced today when you are young, strong, and healthy.
Of course, I’m kidding. The above rationale is silly and moronic. Unfortunately, it mirrors the way the vast majority of salespeople sell.
Equipped with “solution selling” skills, packed with features and benefits, salespeople launch into their solution before their customers understand their problem. Armed with their logic, sellers waste countless hours and money peddling solutions looking for problems, working harder and harder to convince customers they “need” what they are selling and they need it now!
A far, far more effective approach is to focus in on the problem. Work with your customer to understand what isn’t working like it should, what’s the impact of the problem and what’s causing the problem.
Spend the time to help you customer/prospect understand the status quo – and the cost of the status quo. When your customer understand the deficiencies of the status quo, you’ll be ready to collaborate on developing and designing the appropriate solution.
Remember that solutions are worthless until the problem is fully diagnosed and understood.
Do You Know Your Customers?
Anyone who’s ever heard me speak or been exposed to our training programs knows just how much importance I put on knowing your customer – better than they know themselves!
So I ask you – Do you know your customers?
Now before you answer, I’m not asking if you know what they like in their coffee, who their favorite team is, or what part their daughter is playing in the school play. I’m not even talking about knowing what their preferences are when buying your products.
I’m talking about knowing what drives the results your customers are seeking. I’m asking do you know:
- What drives their value proposition?
- What their competitive advantage is (and not just what they say on their website)?
- What the company is doing to exploit that advantage and what barriers are preventing them from exploiting it even further?
- What their profit formula is and what drives the formula?
- What initiatives their company is engaged in to support their value proposition and profit formula.
I constantly hear salespeople claim, “We want to show them some value;” only to learn that the salesperson doesn’t really know what’s going on in their customer’s business.
Let me be clear – the only way you are going to “show value” is by demonstrating how you impact
- your customer’s value proposition,
- their competitive advantage or
- their profit formula.
If you’re not impacting one of those, then there is no value to show.
And you certainly can demonstrate that if you don’t understand their business model to know, as well or better than they do, what’s working, what’s not working, and what you can do to drive results.
By all means, build that personal relationship – people do buy from people they like; but don’t forget to dig deeper for the real knowledge.
Five Years From Now
Think about your typical customer using your typical product/service. And I mean typical – the customer and the offering that is at the center of the commodity part of your business. What is it that they’re getting? Why are they buying it?
How commoditized was that part of your business five years ago? My bet is that your commodity today was an absolute home run five years ago – if it even existed back then.
Now think about your home run today. Where will it be on the commoditization spectrum five years from now? Probably obsolete.
The dominant strategic question in every CEO’s mind should be:
Why is it that people will be buying from us in 5 years?
Take a moment and ponder that question. Now, what are you doing today to pave the way for that future? Remember, your profits today are the result of you efforts from the past – and your profits tomorrow will be directly tied to the actions you take between now and then.
Don’t get lost in the answer to this question. The reality is that it’s virtually impossible to have any idea what we’ll be doing in 5 years or what our customers may need. But, the focus of 5 years is important because it forces you to break out of your company’s comfort zone and to prevent you from becoming complacent.
It is the job of the vast majority of the people in your company to maximize the results of your current business – it’s your job to figure out what that will be in the future.
Where Did The Risk-Taking Go?
For the first time in my life, I’m actually concerned about the future competitiveness of America. It has nothing (at least directly) to do with the recession we are either in or just completing. It has everything to do with the USA going against type.
I just finished reading a research report discussing why and how banks are under extreme margin pressure. The report states:
“Conventional wisdom holds that a steep yield curve is good for banks — borrow short, lend long. With a Fed Funds rate of essentially zero and banks paying almost nothing for deposits as well, bank-funding costs are at all-time lows. Unfortunately, after a prolonged period of near-zero rates, bank assets (both loans and securities) are also re-pricing to all-time low levels. Banks also remain cautious about lending, choosing to park cash in safer, but lower yielding assets.”
As I read this report, it made me think of what the television networks are doing with reality programming. Because of their low cost, networks are almost guaranteed to make money – just not much.
These two points are symbolic of a series of actions that I’m seeing taking place in companies – both big and small. Every time a company makes the decision to focus on exploiting its current assets, rather than exploring how to deepen and expand those assets and the impact of those assets; it is behaving like the banks and television networks.
I’m concerned that many American companies are coming down on the wrong side of a critical, philosophical business question: “Are profits the result of having the right focus or are they the focus?.”
When banks stop lending, or television networks begin relying on cheap reality programming, they are making the decision that profits are the focus. When you’re focus is on profits, you start extracting value from your market and you stop taking real risks because they’re, well, risky.
When you focus on your customers and you answer the question – “what can we do to improve their lives like no one has done before,” and then you pursue that path with dogged determination; then you’re making the decision profits are the result of the right focus. When you make that decision, you see risk through a new prism, and while it does, in fact, represent risk it also provides great reward.
For more than 100 years, America has been the most profitable country in the world by focusing on taking the right risks and creating value better than any other nation. I sure hope we don’t lose that.
The Demand Creator Minute – You Are The Best
In 20+ years working with more than 1,000 small and mid-sized businesses and about 5,000 salespeople, my most surprising discovery has been just how difficult it is for people – from CEO’s to salespeople – to firmly, completely and totally believe that they are the best. Whether it’s the market beating you down or a false sense of humility – get over it! The first – and most important – sale that needs to be made to succeed in selling is with yourself. You have to believe, to the core of your being, that you are THE BEST!
RSS Readers Click Here to Watch Video
The Demand Creator Minute – You Are The Best from Doug Davidoff on Vimeo.
Tiger Woods Needs a Coach
While Tiger Woods is dealing with a myriad of challenges, I am more convinced than ever that Tiger needs to get a coach who:
- He’ll listen to, and
- By extension, won’t tell him what he wants to hear.
Coming off of his worst round of golf since (at least) he turned pro, one has to wonder just what has to happen to get him back on track.
No one can question Tiger’s talent, or his determination. This is precisely why Tiger needs a good coach. There is simply no replacement for the value that an intelligent person who both understands the person and the process.
Until Tiger gets someone to fill this role, I doubt he will be able to get out of his own way. Sure, he may win more tournaments (maybe even the PGA this year), but without the relationship and leadership that only a coach can bring, he won’t be able to sustain performance.
The same is true of every professional. It is simply impossible to stay on course and continue to grow without this type of support.
What do you think?
Play In The Fear
I’ve always thought of fear as something to be managed, or even better, to be conquered. I’ve prided myself on my ability to leave my comfort zone and do the things I know I should be doing, not just the things that are easy for me.
And, I’ve lived by quotes such as, “Success is becoming increasingly comfortable with increasing levels of discomfort.”
While this mindset has allowed me to grow and do things that I could have only dreamed of many years ago, I still found it limiting. I never knew why, but I still found myself struggling with fear. Then I had the opportunity to hear Shawne Duperon of ShawneTV speak last week. She made the observation that she can tell what challenges people will have on camera within 4 seconds of meeting them, and that those challenges always – ALWAYS – come down to how they manifest their fear. She advised to us to become comfortable (if that’s the right word) with fear. “Play in the fear,” she said.
Play in the fear.
Wow, I had never thought about that before. What a great take. In that moment, I realized that fear is not something to be conquered. Fear is actually something to be embraced. I don’t have to do it despite of my fear – I get to do it because of my fear. What a transformation of the mind.
How do you embrace your fear? What are you doing to play with it?
New Times Call For New Thinking
This book review originally appeared in Baltimore and Washington SmartCEO Magazine August 2010 issue.
Running a business used to be about analyzing options, determining a path, and solving the problems that presented themselves along that path. This approach is no longer enough, as more and more, successfully leading a business means that you must continuously manage what have become known as “wicked problems.”
Wicked problems, as defined by brand strategist Marty Neumeier, are “problems so persistent that they seem insoluble. Unlike the relatively tame problems found in math, chess or cost accounting, wicked problems tend to shift disconcertingly with every attempt to solve them. Moreover, the solutions are never right or wrong, just better or worse.”
You know the list:
- Unemployment
- The gulf coast oil spill
- Managing the client experience
- Determining where to invest your limited resources
- Growing your company
Albert Einstein once said, “Problems cannot be solved at the same level of awareness that created them.” As growth-oriented businesses begin to get back to the focus of growing profits, rather than surviving the recession, they must find new ways to attack markets, they must find new methods of thinking, and most importantly they must find new ways to guide planning and execution.
Traditional strategic planning has run its course, and is no longer enough to guide companies through the wicked problems they are sure to encounter. The fundamental problem with strategic planning as it is most often practiced is that it requires companies, and the people within them, to make a fundamental trade-off decision that kills. Businesses must choose between:
- Exploration – the search for new knowledge, and new opportunities. We typically think of the “great entrepreneurs” as being strong here. Intuitive thinking is the dominant position here, supported by the philosophy that “no great product was ever created by a comprehensive double blind market analysis.”
- Exploitation – the maximization of payoff from existing knowledge. Most large companies focus on exploitation where analytical thinking is the dominant approach.
We tend to view start-up businesses as excelling at exploration, and then we trade exploration for exploitation, in order to scale the business. The problem with this approach is that it forces executives to chose the “right” type of thinking, when the reality is that neither approach is right – or wrong.
The time has come for a new form of thinking. A form of thinking that embraces the fact that neither analysis or intuition is enough – the type of thinking applied by the greatest businesses and organizations in the world today. From Apple and IDEO to Proctor and Gamble and The US Military. This new form of thinking is called Design Thinking.
Roger Martin’s new book The Design of Business: Why Design Thinking Is The Next Competitive Advantage addresses these issues as well as any book I’ve come across. Martin defines design thinking as the space that sits squarely between the past-data driven world of analytical thinking and the knowing-without-reasoning world of intuitive thinking. The dominant approach here is abductive logic.
Martin argues, and I agree, that most businesses choose exploitation over exploration because they favor reliability over validity. I’ve lost count of the number of times businesses continue to do the same thing – again and again – only to expect a different result; which is, of course, Einstein’s definition of insanity. They chose this path, not because they are necessarily insane (though I admit that sometimes I wonder), but because it is “safe” and known.
Businesses must embrace the philosophy of Charles Sanders Pierce, a turn-of-the-twentieth-century philosopher, whose great insight was that it is not possible to prove any new thought, concept or idea in advance. The only way to validate them is by applying them. To succeed we must move away from the standard definitions of proof and the false certainty of the past. We must accept the mysteries and have the courage to ask “what could be?”
Pierce called these decisions “logical leaps of faith.” Martin uses McDonalds as a clear example of a company that, in its heyday, applied design thinking. Ray Kroc, and before him the McDonald brothers, had no “proof” that their ideas would work, but they did not lack logic.
With product life cycles shrinking to unimaginable lengths and customer demands increasing every day, businesses have gotten tougher than ever. When you combine that with unprecedented levels of competition and economic disruption, it should not take an intelligent executive long to realize that there are no past lessons to learn from.
Businesses and their leaders must abandon traditional, linear thinking of yesterday, whether it’s based in analysis or intuition. Instead, they must replace with the evolving approach of design thinking. Continuously explore the mysteries of today, hypothesize, trial, error, refine, and explore yet again. The businesses that do that will have the advantage tomorrow, and Martin’s new book is a great place to start.
What’s A Service Worth
There’s an interesting blog series at Brad Farris’ blog about different pricing strategies for service providers. There is probably no other topic that lights a fire or starts a debate amongst service providers than the questions about charging by the hour, retainers or hybrids.
This is a question of increasing importance as more and more “product” providers are “moving up the value chain” by providing services.
Here’s my thought – I think it’s the wrong question. The question is steeped in industrial age thinking, and by looking at it that way, you’re forced to choose the least bad approach.
The winners of tomorrow will be the businesses that gain access to the best capabilities. Going forward, the lines between employees, consultants, outside providers, outsourcing, and insourcing will continue to blur, until for all practical purposes, they no longer exist.
It’s interesting, the very same service providers who lament over how they should charge for their services, don’t seem to struggle with the question when they hire executive talent (ie executive capabilities). They typically pay the executive a salary commensurate with the executive’s abilities and some form of rewards/incentive program for delivering results. In enlightened companies, this approach seems to make everyone happy.
The service providers that gain disproportionate rewards in the future will be the ones that position their services as capabilities and charge accordingly.
-
Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
