The 7 Challenges of Value

The 7 Challenges of Value:from Axia Value Solutions by admin
Challenge #4:  Differentiating. 
The first thing to know about differentiation is that being different isn’t necessarily differentiation.  I have a silver coloured car.  I could have had the same car but in white. That’s different – it’s not silver!  But I didn’t want a white car.  The difference was of no value to me because I didn’t really care one way or the other.  What I did care about was fuel economy and that was a difference to which I did attach a value.  So a car that could do significantly greater mpg would have a difference that I valued (all other things being equal).   That’s differentiation – being different in ways that your customer truly values.  So you need to understand value) and you need to understand your customers.
Get out of the commoditisation straightjacket…
In many ways, the opposite of differentiation is commoditisation – something becomes commoditised when one offering is nearly indistinguishable from another. Buyers frequently try to persuade us that our product or service is identical to a competitor’s, therefore the only thing we need to talk about is price.  More worryingly, many sales people come to believe it! In our experience, very few companies actually sell commodities; there is always room for some differentiation – service levels, relationships, payment terms, stockholdings etc. But remember, any of these is only a differentiation if our customer sees it that way – in other words, sees the value. (Check Challenge # 1 – just what is value? Check Challenge #3 – you need to be talking to those people who appreciate your value!)
Create an approach to differentiation
So we need to create a differentiation strategy which has a number of strands:

1. Really understanding the things that our customers value (back to Challenge #1).  If you have segmented your market, you can look for differentiators firstly at a segment level, and then tailor these to the specific needs of individual customers within the segment. The more you can develop and communicate a differentiation that your customer really values, the less inclined they are likely to be to investigate competitive alternatives.
2. Understanding the strengths and weaknesses of our competitors (what do we need to know about our competitors? Everything!) Inevitably there will be some things that your competitors do that they might do better than you, and vice versa.  Your job is to make sure that the things you do best are the things the customer values the most!
3. Recognising our capabilities and focussing on those areas where we can develop a real edge – what can we do better than our competitors and that is highly valued by our customers? In understanding our customers value drivers in detail we can ensure that we stress our strengths around those areas that add the greatest value.
4. Developing a way of effectively communicating our differentiation (see Challenge # 5)
5. Capturing a share of the value of our differentiation through price (see Challenge # 6)

At Axia Value Solutions we help our clients defend and grow their margins and build profitability.  We do this by helping them to reach a deeper understanding of the value of the solutions they deliver to their customers and through that understanding enable them to differentiate, price and communicate their offer increasingly effectively.
Axia Value Solutions – Value through Understanding
For more information you can contact Mike and Harry at info@axiavalue.com or click on the “Let’s Talk” link on the website www.axiavalue.com