Customers select one company from the others based on getting something better from the one than the other. Better boils down to three factors: more benefits, less risks, and/or less effort. All are unique to the person deciding.
It’s Not About Price
Many believe buying decisions are based on price- that’s never the case. They are sometimes based on affordability but almost always the decision will be based on what is perceived to be a better deal. Factors that need to be considered are: who is doing the differentiating and what are the important benefits they are differentiating?
Macro Versus Micro Competitive Differences
Macro applies to the marketing world where a company’s image and its ability to draw prospects to the company are the main goals. Examples of this are Nordstrom’s customer service and Volvo’s leading edge on safety. Service and safety are how these companies differentiate themselves from the competition. People are drawn to them for these qualities. Macro differentiation requires lots of publicity, time, constant repetition, substance and follow-through by all employees. Management must mandate, reinforce, recognize, reward and chastise to insure it happens.
Micro applies to selling, where each decision-maker has a preference on important characteristics and an opinion as to the product or company’s excellence. Individuals from the same company usually want different things. This is why business-to-business selling is complex. You must show each person involved that you have it-the special characteristic or trait they desire. You also need to show that you can deliver that it better than the competition. This is micro differentiation. It is specific to each person for each sale.
Understanding Who Really Is Buying
If you’re going to be effective in selling your product, you need to understand who really is buying your product. Take the following example: Joe, the operations manager, may want good service (defined in his terms) and Mike, the sales manager, may want high quality (defined in his terms). Both may be interested in the others desire and both also want compliance to the general specification written by John from corporate. Joe is sensitive to the kind of service offered and may be willing to pay more for it. This is not the same as Mike’s focus, which is quality. To complicate matters further, both individuals may want what each thinks their boss wants. Their perceptions of the boss’s desires may be correct or incorrect, and will always be affected by their own desires.
So the solution is to interview all parties to learn what will win each individuals vote. The presentations must show each person that he will get more of his benefits, with less risk, and less effort than any competitors offering. If one does not know the persuading factors for the most powerful person and those that strongly influence him, differentiation in a proposal or presentation becomes macro. This is our global differentiators and you should want it. If it does not hit the right chord with the right person, its not going to sell. Some salespeople try differentiating by including everything. This makes the presentations long and boring, and the important people become no-shows.
When all competitors are saying the same basic things each company appears to look the same. Without the understanding of who wants what, only the buyers will know why they decided on a certain competitor.
To make a difference you have got to know all the deciding factors of the situation. If the decision-makers, especially the most powerful, feel that all the competitors have enough safety built-ins, then Volvo does not have an advantage. If the boss feels service is an extravagance, then Nordstrom will seem expensive.
So use your macro message to build image and leads. Once this draws in the potential client, interview each decision maker to learn all the personal desires. Then you can use micro differentiation to win each individual over.