When I was on active duty in the Army, I had a sign on my desk that proclaimed “Protest Against The Rising Tide of Conformity.” Great message – wrong location! The brass had a hard time figuring me out but put up with me because I had some offsetting qualities.
Today, B2B tech companies are still struggling with this message, which is now labeled “differentiation.” And whether you provide products, services, or both, you are now trying to make your offerings unique while remaining cost competitive. Moreover, since hardware and software are becoming generic, the only three viable long-range strategies they can follow are:
- Provide unique, value added solutions
- Create long-lasting, positive experiences
- Provide unique, value added solutions that are delivered in a way that creates great, positive memories.
I do not consider being the low cost provider as viable long term.
Value added solutions
Value added solutions are difficult to copy because they are based on your business’ unique culture, skills, experience, and insight into customer needs. Even if someone can reverse engineer your value added services, they may not be able to commercialize them. They may well lack the industry experience you have or they don’t understand the subtleties that make your offer attractive to customers.
Your value added services, at a minimum, must meet these criteria:
- They have to be meaningful to your customer. They must offer superior value for things that are important to the prospect.
- You must clearly explain and quantify the benefits in terms your prospect understands.
The value added features have to have long-term value and also must be “upgradable” over time by adding new features and benefits – just like a hardware or software product.
People with services marketing backgrounds generally know how to include key customers as you develop the offerings, which improves the likelihood of success for you.
Great customer experiences
Customer Experience (CX) management is now a full-blown industry. A LinkedIn search for “Customer Experience” groups yielded 1331 choices. A Google search for “customer experience” came up with 180 million results. Almost every business is trying to do “it” with differing levels of success. Yet we can still name the businesses with a great reputation for providing memorable experience. The ones that come to my mind in 10 or so seconds includes:
- Southwest Airlines
- Jet Blue
Zappos is pretty special. They started out with the objective of providing great experience to on-line buyers of footwear. They are so revered that Amazon purchased them and kept them as a stand-alone business, just to have easy, frequent access to learn about how to clone their unique culture.
Here is a true story about Zappos:
They instruct their call center associates to do whatever is necessary to make the customer happy, and they are not measured on how many calls they take in a shift or the average call duration, or whatever. A friend of mine is a Professor in a Boston area business school and specializes in Customer Services. He was telling the Zappos story to an evening class and they did not really believe him so call called the Zappos 800-number and explained the situation. The call taker proceeded to answer questions that ranged from culture to compensation, to management techniques, to even the weather in Las Vegas (where Zappos is located). They were on the phone for almost 2-hours even though there was no intent to buy anything. Would you tolerate that in your call center?
This is differentiation based on customer experience and it is extremely difficult to copy. And their customers keep coming back to actually spend money.
Combine value added solutions with great experiences
Based on what you have just read, if you did business with a company that did both things, how likely would you be to stop doing business with the company? And when they mess-up, how likely are you to contact them and offer to work with them to correct the problem and help find the root cause so it never happens again? This is LOYALTY!!
Zappos as an example – You can go on-line, find a pair of sneakers that you like, call the order entry desk, and ask about customer feedback on your choice. When you finally purchase it, the shipping is free. After trying them on at home for a while, you decide that your choice was not right for you so you send them back, again without paying for return shipping. If you call in again and explain the situation they will probably make other suggestions to satisfy you and even offer you some kind of unexpected bonus on the new order.
Unless you do something special, over time you will lose your unique value proposition. However, by focusing on your customer and delivering value added services in a way that make a memorable, positive impression you can indefinitely postpone the time when your business is considered a commodity.
I am glad I am not selling footwear on-line!