Competitive Differentiation: Selling Value and Negotiation

Selling value and strategic negotiation are critical when it comes to competitive differentiation and sales training.

With inflation on the rise today, many sellers ask me: “How are we supposed to compete when our customers only care about price…and everyone’s cheaper than us?”

Let me tell you what I tell them: price is not the problem. Rather, it’s about how you’re presenting the value of your product or service to them. If you get it wrong and don’t differentiate from your competitors, then absolutely your customers will only care about price. Why? Because you’ll have taught them to see your product or service strictly as a commodity—one that’s indistinguishable from anyone else in the marketplace.

Competitive Differentiation: 3 Examples

The way you differentiate is by presenting your core value in terms your customer cares about. Here are three case studies—followed by five actionable steps—to show you how to do that.

First, a client of mine is the market leader in commercial landscaping equipment. They successfully charge top dollar because they correctly understand every one of their customers has a deeper need than to just buy fancy new equipment. That deeper need is to attract good workers who perform and stick around. Thus, the core value of their product: “It’s faster and easier with us.” They support that claim with facts. “Our product reduces the time required to perform each job by X minutes. That means fewer hours to get more work done.” Since their product is easier to use than others, they also point out that those customers can then hire from a larger pool of less experienced workers and provide them with rewarding, less physically taxing jobs. Happy workers are loyal workers.

Here’s another example: a client of mine sells automated systems that replace manual ones in factories. These are priced ten times higher than the products they replace. Even within their niche, they’re the price leader. And they outsell everyone. Again, they succeed because they understand their client’s deeper need: leveraging robotics to reduce worker injuries and grow a high-quality labour force. Their solution is one that makes HR happy. And delivers ROI to sales, management, and shareholders.

Lastly, there’s the client that makes software managing the admissions process at medical clinics. On the surface, their product makes patient intake easier and gets invoices paid faster. But it also addresses a deeper need: a way to tackle a chronic shortage of nurses. With this solution, clinics attract more nurses, giving them rewarding jobs they care about (i.e., helping patients) rather than being stuck doing unrewarding paperwork. That’s a benefit and savings far greater than the price of software.

Selling Value and Negotiation: Put This Into Action Now

You must act decisively to differentiate. It won’t happen on its own. Do that in five steps.

  1. Identify your core value you offer your customer. Is your product easier, faster, and better? If so, prove it with meaningful facts. Otherwise, you’re just making empty promises that no one will care about.
  2. Understand and define noticeable trends affecting your customer today. What’s their pain point? Is it a labour shortage? Supply chain issues? Show how you solve these problems in units of measure that make sense to them.
  3. Make a map that pinpoints every person and every work title in your customer’s organization. You must understand the positions and responsibilities of everyone in a decision-making chain before you can help solve their problems.
  4. Connect the dots. Ask yourself how your product or service’s core value addresses the noticeable trend for each person in the decision-making chain.
  5. Ask “why should they care?” Examine how your newly differentiated product or service directly affects each division within your customer’s organization—from HR, sales, operations, accounting or even marketing. And make sure you explore those departments that your competition isn’t talking to! Doing so will differentiate you further, creating an apples-to-oranges comparison between you and the competition: eliminating price as the key decision factor.

What Matters to Them Is What Sells

Differentiation is all about understanding what matters to your customer—it’s about knowing the why behind the buy. It solves the right problem. When you crack this, your price won’t be the objection point anymore…unlike those other businesses with commodified products and services.

If you ignore that lesson, get ready to start discounting.

Get it right, you’ll stay on top of your market without compromises.

Connect with Colleen on LinkedIn about competitive differentiation, selling value, negotiation, and sales training.