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24Mar 2018

Process Differentiation: Your Best Response to a Competitor’s Price-Only Position

By SOEMEMPHIS 0

Reprinted from The Don Hutson Report
(This is part three in a series on Don Hutson’s 7 Types of Differentiation.)

In our continuing effort to present commonsense ideas on how you can be unique in your marketplace, this article will cover Process Differentiation, or how you do what you do in a way that makes you unique in your marketplace.

I’ll give you an example. Last week at the Atlantis Hotel in Nassau, Bahamas, I conducted a Selling Value Seminar for a $4 Billion Plastics company which manufactures shopping bags for grocers, department stores, and other retailers. This seminar was billed as their annual Customers Council Trip. The bags they manufacture are of high quality, but still considered “commodity” products. This compelling customer event represents their Process Differentiation since they are the only company among their peers who host such a high quality outing.

Their customers bring their spouses to be a part of these meetings that are held at luxurious venues. This gives the Company’s executives and sales professionals the opportunity to spend some high quality time with and hear from their customers in a very pleasant environment. The customers really appreciate the trip and, of course, the Company gains enhanced customer allegiance, which is critical in their ultra-competitive “commodity” product environment.

What is your process of doing business? Are there things you could do which would help you or your company be perceived as exceptional in some way? When we don’t push the envelope to find ways to display our unique approach to doing business, we tend to perpetuate the image of just another company that sells commodities. Here are some additional “thought starters” for you and your company to consider trying in order to be perceived as exceptional rather than just another vendor.

1. When you have a prospective buyer who openly expresses discontent with you or your industry’s products as being basic and uncreative, inquire about his/her special needs or suggestions as to what he/she would do to make things better. Perhaps that buyer is open and comfortable enough with you to say “If your people could figure out a way to engineer 5% off the weight of these products, I’d be eager to buy from you”. A viable way to combat commoditization is to de-commoditize your product in a meaningful way!

2. What if you and your colleagues could figure out a way to get the products to customers faster? What if your new policy is to ship via overnight carrier for faster delivery when the rest of your industry is shipping via truck line? Perhaps your increased shipping cost will be more than offset by an increase in market share, representing a net gain.

3. What if your company created a point system (like frequent flier miles for example) that serves as a device to de-commoditize your offering and create advantages for them over time?

Perhaps none of the above is perfect for your organization, but the examples shown can certainly stimulate new ideas and logic paths in a strategy meeting of sales and marketing innovators at your company. Let’s think out of the box to identify how we can use Process
Differentiation to creatively enhance our offerings so that we are not at the mercy of price.

 

Written by Society of Entrepreneurs member, Don Hutson, a #1 NY Times and Wall Street Journal Best-selling author and a Hall of Fame speaker. He also serves a CEO of U. S. Learning based in Memphis, TN

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