Here in Vancouver, you’ll find cafes on just about every street corner. Whether you bought your morning cup at Starbucks or some local coffeehouse, chances are you simply ordered the “mild” or “dark”; you don’t actually know (or care to know) the difference between a Peruvian light roast and Ethiopian dark roast. Meanwhile, the price of a drip cup of coffee doesn’t change much anywhere on a given street, or even in a given city. Drip coffee is effectively a commodity product – so coffeehouses that want to stand out from the pack have to innovate. That’s why differentiation in selling is so important.
Hence, Starbucks’ caramel machiatto, or my local favorite café’s branding drive to be known as much for their cheesecake as for their coffee. Café employees tend to be mellow folks, but the need to be different is a constant stress for competitive owners in a saturated market.
Differentiation in selling is essential for your company
The same principles apply more broadly to all kinds of companies, from mobile app developers to sports drink sellers and B2B consultants. They all have to differentiate or die in a self-destructive race to the bottom of commodity pricing. This is basic sales strategy.
A lot of companies just don’t get the importance of differentiation – or worse, they think they’re differentiated when they aren’t. They fill up their advertising with empty adjectives (eg. good, great, best) when customers demand specifics (eg. fastest, spiciest, funniest).
A local service provider I was working with had utter confidence in their marketing slogan (despite their declining sales results that prompted them to call me in for consultation).
“We’re the best service provider in British Columbia!” they proclaimed.
“What’s best?” I replied.
“Well, we’ve been around for 25 years,” the executive replied – as if that was sufficient to explain their big (in reality, non-existent) market advantage.
In this case, what the company was aiming for was to be known as trustworthy, reliable and experienced – not that this was actually clear at all from their promotional slogans. Differentiation in selling wasn’t their strong suit.
But even if it had been clear, that wasn’t enough to differentiate them from their competitors (some of whom had been in business almost as long, as it turned out). in fact, there was some evidence that the company was just seen as old and stodgy. They were out of touch with the changing needs of their customers. In this case, we had to revisit their service model and look for ways to truly differentiate the business. That’s a process that’s still ongoing. In the meantime, their competitors are already doing much to differentiate themselves. Playing catch-up on the differentiation angle can be catastrophically dangerous for a company. That’s particularly true for one that doesn’t have the advantage of a 25-year old list of customers.
Differentiation in selling has to meet a specific need where customers can instantly see the value. If you don’t want to get stuck back in commodity land, it’s important for your competitor not to be able to offer it. Otherwise, you’re all just selling the same cup of coffee. In that race to the bottom, everyone loses.