Identifying a sustainable competitive advantage: what drives product strategies?
Traditionally, identifying a sustainable competitive advantage means finding ways in which companies differentiate products and services. Being faster, better, more feature-rich, and cost-effective are differences that drive product strategies, R&D efforts, marketing, and advertising campaigns, sales approaches, and collateral materials.
But, oh, how things have changed.
“It doesn’t matter what products you buy. Most products are now good enough to serve the majority of users most of the time.” Simon Hayward, VP and Gartner Fellow, spoke these words.
Most products, especially tech solutions, do more than customers could ever use. Product manuals are inches thick. The number of features and functions can make them too overwhelming to consider.
So how do you differentiate?
Competitive advantages are not dependent on a company’s ability to produce differentiated products. Rather, it’s important how they engage with their customers to become the best partner possible.
That’s right. It’s not about introducing the next big thing. We can’t all be Apple. In order to gain market share and protect/grow existing customer relationships, organizations must affect a shift in perception among their prospects and customers. They must move from being perceived as an “Approved Vendor” to a “Trusted Advisor/Partner.”
CSO Insights is a highly respected research firm that surveys thousands of Chief Sales Officers. They represent a broad spectrum of businesses. They define Approved Vendors as: “companies seen by the majority of customers as a legitimate provider of the products or services offered, but are not recognized for having any significant sustainable, competitive edge over alternative offerings.” A Trusted Partner is defined by CSO as “a company seen as a long-term partner whose contributions (products, insights, processes, etc.), are viewed as key to client’s long-term success.”
Trusted Partner Status
Data from CSO Insights Sales Performance Optimization Report is quite interesting. It shows that average sales performance improved in many areas last year. However, less than one-third of the organizations surveyed had reached the “Trusted Partner” status. For companies achieving it, the rewards were plentiful. Nearly two-thirds of their reps met or exceeded quota. 90% met company plan while experiencing the lowest sales-force turnover rate.
So it turns out that you have to become the differentiator. You have to be a competitive advantage. You have to be an asset. That means your entire sales organization, from field to senior management, has to find ways to become indispensable to your customers. You have to bring more value in your interactions with them, finding ways in which you interpret the power of your products and services into measurable, strategic value to what they are trying to accomplish with their business.