Strictly for Sales
The Power of Good Competition
Market research pioneer Alfred Politz said, “Nothing can do you so much harm as a lousy competitor. Be thankful for a good competitor.” If this is true, distributors have a
lot to be thankful for these days. AmazonSupply has entered the
industrial supply business with an offering of 500,000 products
and a logistics platform that is the envy of all online sellers. An
online search this morning for industrial distributors yielded 13. 4
million hits. A local search for industrial suppliers in my hometown
of St. Louis, MO produced dozens of sources. How can distributors
stand out in their markets?
“In real estate, it is location, location, location; in business, it is
differentiate, differentiate, differentiate,” said the late Roberto
Goizueta, CEO of Coca-Cola. There is little future for a distributor
that looks like every other distributor. Jack Trout wrote a book,
Differentiate or Die. Both Goizueta and Trout admonished leaders
to find a way to stand out from the crowd. The “me-too” bandwagon is crowded these days. Are distributors running short of
good ideas or good leaders?
When one company offers managed inventory, others quickly
design their own inventory management programs. If one competitor offers training, it is not long before others offer training.
Subdividing, sub-assembly, and kitting face the same fate. With
so many companies offering look-alike products and services, why
wouldn’t a customer buy at the cheapest price? There is no compelling reason to pay more from one distributor that looks a lot
like everyone else. You cannot blame the customer for your failure
to differentiate. They are merely following your lead.
From Shakespeare (“To thine own self be true”), to Emerson
(“Imitation is suicide”), to Steve Jobs (“Your time is limited, so
don’t waste it living someone else’s life”), great thinkers have seen
the folly of falling in lock-step with others. Distributors must seek
ways to differentiate themselves from all other buying alternatives
available to customers. Here are some ways to stand out from the
First, solve a unique problem. Look for the tough problems that
everyone else has given up on, customers and competitors. Your
solution may work. It is worth the effort. Everyone wants the easy
problems. Your willingness to study the tough challenges says a
great deal about your company. Thus begins your differentiation.
Second, solve a common problem in a unique way. The problem
may look the same to two different competitors, but the solutions
can be seen through different eyes. Fresh eyes make everything
look new. Do not merely accept the standard way of doing some-
thing as the best way to do something. It may simply be the easy
way to do something.
Third, create a new market space where none exists. Consignment inventory opened a new market space when it was
launched. Being open on weekends may be a new market space.
Create a space where the competition is absent. Instead of slicing
the pie thinner, you are making the pie bigger.
Fourth, look to your products, packaging, price, service, and
people. It may be that none of these individually are that unique,
but the way you bundle them may stand out among competitors.
Realize that standing out from the crowd is an active verb. It is
not so much who you are that makes you different as what you do
that makes you different.
There is another dimension to differentiation that escapes most
people. If you are sold on the concept of differentiation, individuality, and standing out, then your customers must be different. It
is a two-way street. You cannot expect the customer to view you
as being different if you lump their needs into the same kettle as
everyone else in the industry and stir the pot for a value proposition. Understanding the differences among customers paves the
way for you to understand how you can approach each of them
differently. Does individualization of your value proposition make
you different from your competitors? Treating every customer
the same is commoditization. Treating each customer as someone
unique is differentiation.
Another dimension of differentiation is that standing out is
more than contrast. Those who differentiate to stand out from
the crowd obsess on what the competition does or fails to do.
Those who stand out because they like being outstanding have
a different view of things. They are more curious about their potential than concerned about the competition. The last statement
is powerful. It means that your potential, not the competition, is
driving your strategy.
Steve Jobs continued his Stanford graduation speech by saying,
“Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown
out your own inner voice. And most important, have the courage to
follow your heart and intuition. They somehow already know what
you truly want to become. Everything else is secondary.”
Tom Reilly is literally the guy who wrote the book on Value-Added Selling. You may visit him online at www.TomReilly-Training.com.