Selling Competitive Advantage

Selling Competitive Advantage

Unless you are engaging with the company’s top executives (e.g., CEO, CFO or COO), you are generally dealing with high-level decision-makers that either run a profit center (e.g., sales) or cost center (e.g., IT). Both are primarily concerned with improving their organization’s contribution to the company’s profit. For profit centers, it means increasing revenue. For cost centers, it means reducing expenses. The best sellers help organizations improve their profit contributions by becoming more effective and efficient.

To establish credibility and trust, it is helpful to show decision-makers how their current performance relates to the industry average. If they are performing below the industry average, their top competitors are likely eating their lunch. If they are performing at the industry average, they probably lack differentiation and uniqueness. In these situations, the best sellers demonstrate how they can help decision-makers increase future performance to a level substantially higher than the industry average, creating both competitive advantage and market leadership.

What is competitive advantage? Competitive advantage is the attribute(s) that allow an organization to outperform the competition, as determined by profits exceeding the industry average over the long-term. Thus, the best sellers partner with decision-makers to improve profit contribution. The difference between the industry average and the higher level of performance is the decision-maker’s competitive advantage and the seller’s value add. Organizational improvement should always be measured in dollar values to ensure a meaningful ROI and payback can be demonstrated.

Benchmarks are the seller’s financial metrics for delivering value above the customer’s current performance and industry average. Benchmarks must be industry-specific to be meaningful. Benchmarks enable sellers to quantify profit potential and how long it. Profit potential is quantified by comparing the organization’s current performance with the industry average and past customer success (higher performance). Remember, you are not selling products. You are not selling solutions to business problems. You are selling improved profit.

To grow an organization, you must know it. Knowing an organization means understanding the decision-maker’s critical business issues (CBIs) and key performance indicators (KPIs). CBIs are the 20% of challenges or opportunities that impact 80% of the organization’s immediate success. Challenges include better positioning the organization against the competition. Opportunities include understanding the organization’s customers and improving profits. KPIs reveal the organization’s performance against established targets.

Increasing the decision-maker’s organizational performance to the industry average does NOT create competitive advantage or market leadership. Competitive advantage requires the organization’s profits to exceed the industry average over the long-term. Creating competitive advantage helps organization’s better contribute to the company’s overall profit. The best sellers actively seek to understand CBIs and KPIs to help decision-maker’s increase revenue and reduce costs. When the decision-maker is successful, the seller is successful.

All contents copyright © 2012, Josh Lowry. All rights reserved.

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