Differentiation is one of the fundamentals to marketing success. The ability to describe the customer benefits you provide will set you apart from the rest of the vendors within your product category and will help you build a profitable customer list.
All too often, a business will resort to price cutting as a way to differentiate them from the competition thinking that the lower prices will help them win new customers. Price cutting is the expensive way to grow a business because for every percentage of price discount offered, there is an exponentially greater reduction in the percentage of profit margin made. That leads to a need for a large growth in volume which doesn’t come easily, certainly not without a major marketing effort which costs money, which further reduces the profit margin on the existing sales. In other words, it is very difficult to actually increase the volume of sales to make up for the lost margins that result from discounting.
Adding value is the profitable way to build a customer list because you are rewarded for the benefits you provide to the customer. Remember the old sales adage, the carpenter doesn’t buy a quarter inch drill bit because he wants a drill bit. He buys the quarter inch drill bit because he needs to drill a quarter inch hole. Developing the ability to demonstrate the benefits the customer will enjoy if they choose you as the vendor is a basic building block to your future success.
People do business with people that they like sooner than they do business with people they don’t like. Prospects tend to like people who bring them ‘something’ they can use. Establishing your credentials as a qualified vendor is the first step in getting your foot in the door.
Bernie sells insurance, a very competitive business. I knew Bernie because he sold insurance to the two principals at our company back in the day. They were very successful businessmen and did a lot of business with Bernie so I perceived him to be a qualified insurance sales person. When he came out to the office, Bernie would often stop by my office to say hi.
One day Bernie called to tell me that my insurance sales person was going to retire and he wanted to get an appointment with me to come out and see if I would like to transfer my insurance business over to him. I told him not to bother, just send me the paperwork and I’d be happy to move my policy over to him. After all, he had the credibility of being my boss’s insurance agent, which was good enough for me. But Bernie insisted so we set the appointment.
When Bernie showed up for the appointment, we exchanged some pleasantries and then he opened up his portfolio and presented me with his “professional qualifications”. It was all very conversational. He started out by saying he wanted to tell me a little bit about himself. He handed me a piece of paper that looked much like a Resume but instead of a job history, it was a description of his training, experiences and professional certifications. Bernie modestly described how his experience could help me with the many different choices there are in the world of insurance.
Bernie had used some high quality bonded paper for his presentation. It was well laid out using a word processor. There was lots of white space to accentuate the bullet points. It was all very elegant. But what impressed me most was the effort he put forth to “earn” my business. I was all ready to just hand it over to him. After all, he worked for the same insurance company as my previous agent. I was impressed that he was treating me like an important client when I knew there were bigger prospects than me.
Bernie was doing more that day than just getting a new customer. He was setting the stage for future meetings that would develop into a relationship that lasts to this day.
But that is only the beginning to this story. I was so impressed with Bernie’s presentation and the way he demonstrated his qualifications to by my insurance agent that I told my sales department about the experience. As you would expect, nobody else was very impressed.
One day, one of the younger people on my sales department came to me for help with a tough prospect. The sales person was a young man in his mid twenties. The prospect was in his early sixties. There was a huge age gap that was contributing to a communication problem that was inhibiting the sales person from getting an appointment.
I reminded the young sales person about how Bernie “presented” himself to me with his professional qualifications and instructed him to prepare his own one page presentation. Since the young man was short on experience, some of the bullet points on his Resume related to his academic achievements and college activities, specifically, lettering on the college golf team.
When the young man met with the prospect, he presented his professional qualifications. The prospect was impressed with the effort to demonstrate how much he wanted to earn the business. As the prospect read the list of achievements a big smile came over his face as he read the part about lettering on the college golf team. It turns out he was an alum from the same college. That little connection bridged the age gap and helped start a very nice business relationship for that sales person.
If you’re having trouble differentiating yourself from the competition, why not consider creating your own professional qualifications. A reluctant sales person once told me they felt as if they were ‘applying for a job’. Hello? Yes, that’s exactly the point. On the very first call with that sales person, the prospect said as much, but that they liked it because they did want the sales person to ‘work’ for him, back at the Radio station.
Another sales person felt strongly about her faith and youth activities so she listed the name of her church and the fact that she was a Girl Scout leader. Some very big prospects saw that and started to do some business with her because they shared similar interests.
When you create your own professional qualifications, invest some time and money to make something that stands out. Use quality paper. Get professional layout assistance if you’re not that good with a word processor. Watch what garners attention and what doesn’t. Don’t be afraid to tweak it from time to time. Keep it updated with your latest achievements.
When you meet with the prospect, you are applying for the job of being their preferred vendor. Make the effort to earn the position.