In last month’s SalesPulse I talked about how buyers were commoditising our offerings to negate those characteristics that make us different. There is research to support this statement; for example in the US SSI Data having researched some 40 companies and 750 B2B sales people say there has been a sharp decline in solution uniqueness and it is forecast to decline further. In the UK and Europe, according to Doubleview LLC, 76% of over 3000 B2B sales people say they are treated more like commodity sellers than they were three years ago.

Why is this the case? Today there are twice as many competitors than there were five years ago. Globalisation means that your competitors can come from just about anywhere; opportunist suppliers will go where they can make a quick killing and there is more information about everything thanks to the internet. Whereas ten years ago customers came to you for information, they probably know it before you do.

The impacts are increased sales costs, longer sales cycles and reduced margins.

Against this background the key question is “what do we have to do to become less vulnerable and more unique”?

Quite simply you need to find a new way to differentiate. Given a level playing field, or even one tilted against them the best sales person will always win. Why do they win? – because they understand their customer’s business better than their competitors and they can create more value than them. We are now into the sales jargon of “creating value”, so how would you define value? Well here’s one I like:

Value = Benefits – Costs

Where benefits are what the customer gets (return on investment, service, convenience etc.) and costs (money, inconvenience, risk etc.) are what the customer gives. Let me give you an example. Every dwelling and industrial unit has a rainfall removal system in the form of gutters and downpipes. These come in various qualities and prices but to a builder they are just a commodity. So how do you create value for a bunch of guttering and down pipes. Here are a number ways a supplier might do it.

– We design, at no additional cost the optimum rain water removal system yielding effectiveness (does what is needed), efficiency (minimum number of components and associated cost) and appeal (minimum number of unsightly downpipes)

– We take the risk of under/over estimating away (if we get it wrong you know who will put it right!)

– We deliver to your site when you need it (you don’t need to send someone to a builders’ merchant in a truck to get it)

– We maintain your buying power with the merchant (they will invoice you as if it came from them).

These benefits improve the value of the product as there is no additional cost and indeed they could be more valuable than the product itself. To create value salespeople have to understand what it is they’re selling, the customer or prospect’s business and to whom they are speaking. The value articulated above is great for a product evaluator and even a professional buyer but if you were speaking to a board member would it appeal to them? It might do of course, but they would be more interested in how you can help them solve their problems, beat their competitors or support their strategic plan. This is where a deep knowledge of their company and business is really necessary because without it there is little chance that you can create sufficient value for them.

Reproduced with the permission of Koru Consulting Ltd.