Most businesses start with an idea for a product or service and then next thing the founders know, they have a growing company. In the beginning, that can be enough. But then the portfolio needs to expand to meet new customer requirements, formidable competitors enter the market, and pricing pressures increase.
The inevitable direction this path takes is commoditization where the distinction between the company’s offerings and a competitor is no longer as clear, or as important, to the customer. The buyer now needs a different relationship with the company that extends beyond the product features.
A survey by CEB reveals that only 14% of B2B customers perceive enough of a difference in vendor offerings and value to be willing to pay for it. Contrast that with the emphasis most B2B companies put on product and service features that sound remarkably similar to all of their competitors. No wonder sales close rates and prices start to suffer. Customers are not really buying what the vendor thinks is important. So what are they buying if not a product or service that solves a problem?
Let’s go back to that same CEB survey which indicates that emotional and personal values have a 42.6% impact on the purchase decisions compared to a 21.4% for product value. People are buying the company more than they are the products. Any organization that finds a way to distinguish the company in the market, supported by a strong product and service portfolio, has a tremendous opportunity to build long-lasting value in everything it does.
Finding your distinction
Transitioning from product-driven brand attributes to corporate differentiation requires a completely different perspective. It means leaving behind the tangible world of product features and entering an intangible exploration of purpose, values, emotions and perceptions. The products and services you sell today go from defining your identity to simply supporting it.
One of the best examples of this in modern times is, of course, Apple. The company is as much about disruption as it is technology, which has allowed it to enter incredibly competitive markets dominated by large, established players, and turn the entire thing on its head. They just think differently.
We can’t all be Apple, but any company can identify its uniqueness in a market and make sure everything is designed to deliver on that distinction. The first step is to put yourself in your customers’ shoes and see the world the way they see it. A genuine, authentic effort to understanding your customer will help you see your company in a whole new way.
The second step is to explore what is, or what could be, truly unique about your organization. For companies that have a long history, the answer may lie in something that has shaped many years of success even as the leadership, business and markets changed. For emerging companies, it may lie in the vision of what the organization is capable of achieving in the future.
Here are just a few examples of where to look:
History: The way the company was started, what it has become known for, or what its purpose is.
Business: The market position, distribution channels, customer type or internal systems.
Organization: The way the business is organized, how it is staffed, or its involvement in the community.
Culture: Traditions, values, personality or legacies.
Products: Current or new offerings, the relationship between the products or services, or the processes used to create them.
People: Employee loyalty, experience, expertise or credentials.
Vista Metals strives for excellence, always
Vista Metals, the largest independent producer of specialty aluminum products in the world, is one of those companies with a long history that took a fresh look at itself. The company had always produced high quality products, but increasing global competition created a market environment where that was no longer enough.
Jim Hughes, a business growth consultant in Southern California, helped the company realize that by delivering “second-to-none” customer service, Vista could set itself apart from price-driven competitors and maximize its value. A new tagline “Higher caliber. So is the metal.” signals a commitment to excellence in the organization that goes beyond the product it produces.
To make sure it delivered on the promise, Vista had to make some changes in the way it operated. This included rewriting customer service guidelines to track and improve performance, increasing inventories for quicker deliveries, and creating a branded service program called “You First” to demonstrate its commitment to the customer.
If a 47-year-old B2B company in an industrial business can distinguish itself in new ways, so can any company. There is a great story waiting to be told about your organization. And it can make all the difference to your customers and your business.