“Make your product easier to buy than your competition, or you will find your customers buying from them, not you.” – Mark Cuban
“The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” – Rupert Murdoch
We would all like to think we’re different and that what we sell is unique and beyond compare. Unfortunately, we know that’s not really true. Office furniture and many of the other ancillary products sold by dealers and suppliers have come to be looked upon as commodities…not all, but most.
It is becoming harder and harder for dealers and suppliers to differentiate themselves from their competition. The word differentiation is used a lot these days, but let’s make sure we’re using the correct definition.
Differentiation : to mark or show a difference in; constitute a contrasting element that distinguishes; to become distinct or different in character
Synonyms - difference, discern, discriminate, distinguish, secern (to discern as separate), separate
What this all means is that your existing and potential customers will only give you an order when you have helped them identify a clear advantage or benefit to buying a product or service from you…also known as “demonstrating compelling value.” In basic sales 101 terms, it means identifying the benefits they want and need…in the client’s words, not yours.
According to a post from PMG (Priority Metrics Group) a marketing consulting firm, here are the factors to consider for differentiation:
A difference is worth establishing when it meets at least one of the following criteria:
Valuable : the perceived benefit exceeds the cost
Important : delivers a benefit critical to success
Distinctive : unique or offered in a distinctive way
Superior : better technology, faster
Emotional : ties to a core emotion — love, hate, desire
Communicates : understood and visible
Preemptive : cannot be easily copied
Affordable : customers can pay the higher price
Profitable : contribution (margin times volume) exceeds cost of difference
With new products, suppliers, and hybrid dealerships popping up, everyone will need to keep finding new ways to differentiate themselves in order to attract new customers.
There are lots of ways to demonstrate differentiation, but here are some of the most common.
1. Product is typically the first category a salesperson will use to differentiate themselves from the competition. This will include features, advantages, performance, durability, conformance, durability, reliability, and warranty. These are all important, so the customer must see the benefit of your product over the competitor’s or they will see them as equal.
2. Price Differentiation is a major concern for everyone. Margins in the office furniture have been on the decline for many years. BIFMA numbers show that the margins on aligned product sales have declined by an average of 6% over the last 18 years and will continue to do so. It is becoming increasingly difficult to explain the price difference to a customer when they perceive all the products are equal. Inexperienced or naive sales and marketing people often think the best way to get business is by under-pricing everybody else. Narrow margins have put more companies out of business than any other single factor. Other factors can often outweigh price…more on this.
3. Relationship Differentiation is critical, as a strong relationship will often be enough to make up for a price difference. If you maintain a strong relationship with your clients , you have an inside track on future business. This environment will make you the envy of your competitors, and your client may not even give your competitor a chance if the relationship is strong enough. According to Marketing Metrics, the probability of selling to an existing customer is 60 -70% when there is a strong relationship. Happy customers will often accept a price difference of up to 10% and not change vendors if all other factors are equal and the relationship is strong enough. According to a Customer Experience Impact Report by Harris Interactive, “Almost nine out of ten U.S. consumers say they would pay more to ensure a superior customer experience.”
4. Service Differentiation is one of the best ways to overcome price concerns. Many companies and customers are willing to pay more for higher levels of service and a good customer experience. This covers many areas such as the ease of ordering, delivery, installation, post-installation training, courtesy, responsiveness, communication, and problem solving.
According to an American Express survey, seven in ten Americans said they were willing to spend more with companies they felt provided excellent customer service and three in five Americans (59%) would try a new brand or company for a better service experience.
According to a McKinsey survey, 70% of buying experiences are based on how the customer feels they are being treated. In a Time magazine article, one survey showed that 80% of companies say they deliver “superior” customer service, but only 8% of people think these same companies deliver “superior” customer service. Ouch!
Internal processes play a much bigger role in customer satisfaction than ever before. Too many companies don’t pay enough attention to the processes that dictate the image of their business model. Remember that how business is conducted changes every day due to globalization, e-commerce, the internet, and new software programs. Take advantage of innovation rather than being a victim of it! Basic rule: make it easy for the customer to communicate and buy.
5. Marketing Differentiation. It is imperative to determine ways to develop a difference in your sales and marketing tactics that set you and your company apart in your marketplace.
While marketing doesn’t always appear to be at the forefront of a sale, it is often the key to starting a relationship. A company’s marketing tools can often set them apart from their competitors, so much so, that a good first impression may set the bar too high for the competition to contend. The look and feel of your marketing materials make a major difference. It is important to consider more than one medium when creating a marketing plan. This is a key factor in gaining market share.
One major mistake that many companies make is eliminating printed material from their marketing tools. Some will say that they no longer sell that way…but they forget that it is not how they sell, but rather how the customer receives and retains information.
Physical materials are more likely to keep someone’s attention that something viewed electronically. Reading in print allows for better focus and retention along with fewer distractions. Research shows that products are more desirable when viewed in print due to increased brain activity and emotional processing.
Not all companies can afford a separate marketing staff or agency. It is important for them to take advantage of tools available from existing groups. For example, INDEAL offers all its members tools that can create a full marketing program; from the customizable printed and digital Idea and Solutions Book suites and Inspiration books, to the many social media sites they can access, such as Twitter, LinkedIn, Instagram, and Facebook.
Some more statistics to consider; this one from a Touch Agency survey…”Customers are 75% more likely to purchase from a brand they follow on Twitter.”
From the Pew Research Center’s Internet and American Life Project – “58% of Americans perform online research about the products and services that they are considering purchasing.” The information available and ease of use on a company’s website is critical. Linking your marketing material (such as the digital INDEAL Idea Books) on your website or even in your e-mail signature offers passive marketing.
Finally, beware the internet. As Gail Goodman wrote in Entrepreneur, “ Knowing what’s being said about your company online allows you to see where you’re succeeding and where you need improvement.”
Don’t get “Yelped.”
As David Pogue wrote in Scientific American back in 2011, “ The rise of the citizen review site is a sobering development. No longer are you on top of the mountain, blasting your marketing message down to the masses through a megaphone. All of a sudden, the masses are conversing with one another. If your service or product isn’t any good, they’ll out you.”
Companies and their key decision-makers will always be willing to pay for expertise and do business with those individuals and companies they know, like, and trust!
Jim Heilborn is a business consultant specializing in the office furniture/products industry, working nationwide with dealers, manufacturers, and service providers. Jim has been associated with INDEAL for over seven years, specializing in training and dealer development. Jim can be reached at firstname.lastname@example.org or 716.828.8235.