Recently, I was being interviewed on value creation and differentiation. I was asked the question, “What’s the difference between differentiation and dissimilarity?” The question caused me to pause for a moment. Frankly, I hadn’t thought about it before, but the more I thought, it’s an important distinction for sales people and can become an important strategic issue for executives and business strategists.
It’s easiest to understand these concepts if we take a walk into a friend’s garage. It’s an interesting, eclectic set of vehicles: A Porsche 911, an F-150 Pickup, Ducati and KTM motorcycles. Let me add to this idea. Whenever he travels, an Uber car comes to his home to take him to the airport. On the surface, these are 5 very similar solutions. They each get him from point A to point B. They even fit into the same general product/solution category — personal transportation.
But here’s where his buying behavior becomes interesting. As he considered the purchase of each alternative, he was looking at fundamentally different “problems.” When he bought the Porsche, he was looking for transportation, but a lot more–he was looking for a certain driving experience, perhaps some “social positioning,” (OK, he calls it the “chick magnet” factor.)
As he made the purchase decision, he didn’t evaluate broad alternatives of cars, motorcycles, pick-up trucks, or service providers, his buying decision focused on alternatives to a certain type of driving experience. Consequently, in buying the Porsche, he evaluated Audi’s, Jag’s, Mercedes, and Ferrari.
This is where differentiation comes in. As he was evaluating the alternative sports cars, each differentiated itself and the experience he was looking for. Differentiation is important and relevant in specific buying decisions. As he was evaluating alternative sports cars, differentiation between alternatives was critical. The sales person for each brand tried to differentiate the driving experience and other factors-aligning with the things most critical to him in making a choice.
This is the same with everything we sell, we seek to differentiate ourselves from other, typically non-dissimilar, alternatives.
Customers typically don’t evaluate dissimilar opportunities, so in my friend’s case, even if a pickup truck sales person had called him with a fantastic deal, he would not have considered that alternative–at least for the sport car decision.
However, buyers change their perspectives and problems, so what was a valid solution in the past, may be a irrelevant for current requirements. For example, my friend is solving different transportation/lifestyle problems with his pickup, bikes, and when he uses Uber.
The Porsche sales person would have had no success when my friend was looking for pickups, even though my friend had bought from him and had been very happy.
As sales people, sometimes we miss this shift with our customers, they may be loyal customers, but every once in a while they may be solving a dissimilar problem. If we don’t recognize that, then we waste huge amounts of time and potentially create a lot of customer ill will.
Why is this important? Sometimes, as we sell, we confuse dissimilarity with differentiation. We think the customer is looking for a vehicle and we try to sell a vehicle, rather than the solution the customer is looking for.
But this is seldom a real problem, even if we don’t recognize the dissimilarity, the customer does and immediately disqualifies the dissimilar from their consideration.
So typically all our strategies as sales people and companies focuses on differentiation.
Now here comes the shocker–it’s probably something that business strategies, product management have to be more concerned with than sales people, but sales people probably see it first. What happens when there is disruption?
Disruption is a game changer, a paradigm shifter. Disruption is where the buyer considers dissimilar alternatives. Disruption threatens whole industries and categories, not just individual vendors.
Using the car/lifestyle/transportation example, in some cases Uber might become a disruptor–at least when challenging the notion of vehicle ownership. For example, many people are moving away from the concept of vehicle ownership, looking for services of various types. Uber, Lyft, Zipcar, Car Rentals, and other types of sharing services (Zipcar is dissimilar to Uber and Lyft).
Disruption happens when someone, a provider of a dissimilar solution, or the customer starts reframing their problem. It’s when, all of a sudden there is a different competitor than we’ve seen before. For instance, it would be as if my friend opened his evaluation of sports cars to include Zipcar.
We don’t know how to compete, we can’t differentiate because it is truly Apples and Oranges (or Porsches and Zipcars.) Sometimes, we don’t recognize we have to compete–we don’t realize how seriously the customer may be considering the disruptor.
A great example of this is in the shift from premise/license based software solutions to cloud based solutions. It disrupted not only the software solution providers but also the systems providers. What Salesforce.com was selling in competition to Oracle/Siebel, wasn’t really a competitive CRM system, it was selling a different way of viewing the implementation/installation/support problem.
What do we do about this?
Well, nothing as long as the customer isn’t considering dissimilar solutions. The danger happens when we start seeing our customers include dissimilar solutions in their evaluations. It means the customer is redefining how they look at a problem. (Either on their own, or because someone has convinced them to redefine their problem.)
When we start to see this, we need to reframe what we think of as a solution–and how well what we sell fits the new definition of the “problem.” Too often, we ignore it, to often we become defensive and more strident in protecting the traditional view of the problem.
I suspect disruption doesn’t happen “disruptively,” at least overnight. I suspect it sneaks up on us until there is a tipping point, where the world has changed and we and are similar similar competition become irrelevant.
In reality, the seeds of disruption are being planted every day. If we are to stay relevant to our customers we have to be attentive. When we see our customers including dissimilar solutions into their consideration, we need to be worried. We need to recognize the customer is beginning to reframe the way they are looking at their problem.
As we start seeing “non-traditional” or dissimilar competitors increasingly come into consideration, we have to be attentive. These non-traditional alternatives may not be selected initially, but the fact the customer is considering them, indicates the customer is reframing how they define the problem. The more frequently they show up, as they start to win, we can be certain our markets are being disrupted.
We can’t ignore this, we have to continue to learn, innovate, and change our own solutions and approaches if we hope to be relevant, grow, and thrive.Business & Finance Articles on Business 2 Community