There are 2 ways to break the monotony of a commoditized market

1) Create a disruptive technology that none of your competitors have thought of and turn the market upside down
2) Use consultative selling model that invests time in understanding building customer empathy, differentiating by how you engage and mould your proposition to each customer scenario.
To me 2 seems easier than 1.
But there seems to be resistance from taking the easy path across many sectors we work in.
Before setting up Sonsie Selling I was a sales leader in the IT Service Management software market. If you want to see a commoditized market –ITSM is a prime example.
Yes there have been disruptive technology releases from time to time.
A few years ago Service-Now entered the market with the ITSM Software as a Service offering. Now in 2012 there is nothing disruptive about ITSM SaaS as pretty much all the vendors – even the small guys – offer this.
Another disruption was Service Catalogue. It was and is a good concept. NewScale caused the initial disruption with their focused product release. But now in 2012 NewScale has been gobbled up by Cisco and it is a standard for all vendors to have a Service Catalogue as part of the product suite. They are really now just squabbling over who provides the nicest one.
If I was a customer looking for a replacement solution (as it is commoditized the ITSM market is well over 90% replacement selling) then I would not be able to make a confident decision based solely on a product demo comparison. How can you when all the products look so similar and seem to do the same things.
I am not saying do not demo your product even in a crowded market like ITSM. But the demo is only part of the selling approach and should be done at the right time in a controlled manner.
My last ITSM sales leader role was with one of the mid-size vendors who had been around since the earliest days of the market. They still believed their product was the best – most technology company owners and CTOs do. But there was nothing disruptive about the product set.
But we did consistently compete and win against the disrupters even when they were at their height of disruption.
The approach we took was not radical for me but it was to this mid-size ITSM vendor. We delayed showing product until we had a solid understanding of the customer including their needs and goals.
That meant that when we went through the product the demo focused on areas of functionality that address these needs and goals.
We also framed the demo with clear communication (normally using a Whiteboard) of what was about to be shown. This gave the customer the context of why a product feature added value to them and their business.
There is nothing new in a consultative selling approach. But because the ITSM market was commoditized with vendors sticking their head in the sand refusing to accept this fact – it was actually a fresh approach that worked.
It was challenging for the sales guys. Firstly they were moving away from their comfort zone – only talking about their company and showing their product. Secondly they had to learn how to overcome the customer objection – “Show me your product first. Then I will share my issues and goals”. With good managers coaching the sales guys in the field these challenges are of course surmountable.
Since leaving ITSM and forming Sonsie Selling we have been helping many other vendors facing the challenge of a commoditized market.
In Business Intelligence, QlikTech built a disruptive technology in the form of QlikView. It is an In-Memory highly flexible analytical solution for end users.
QlikTech recognised that to maintain their disruptive impact a move to consultative selling was required. We helped them on that journey by providing the customer facing tools that the sale team use with their customers to understand issues and objectives.
QlikView is still a very appealing product but there other BI vendors now offering In-Memory flexibility for end users. The market has raced to catch up and the QlikView initial disruption will level out. So it was a good strategic decision for QlikTech to move away from relying on product demonstrations only. Glad we were able to help them.
As a company that takes pride in maintaining confidentiality we can and have helped other BI vendors with their consultative selling approach.
Our view is that each vendor has a unique proposition but they can struggle to make this clear to a customer. It will not come across in product demonstrations without customer context or long winded PowerPoint decks.
It comes back to the simplification of a differentiated and customer focused message. This can be achieved in a number of ways but we have found WhiteboardSelling is one of the best methods. Using this approach a single page storyboard will contain all the unique selling points required for a sales person to explain to the customer why their solution is best suited to meet their needs.
WhiteboardSelling is ideal for flexible consultative selling, breaking the monotony of how a vendor engages with customers and increase chance of winning business in a commoditized market.
If you work for a vendor it is easier to understand what is unique about the product you sell. After all you live and breathe the functionality of the product every day. It is your job to know what is good about your product. But differentiation that seems obvious inside the corporate walls of the vendor’s offices may not be so clear from the customer position. That is why those who adopt a consultative selling approach will succeed and others will struggle to maintain a market position.
Here are some other markets where vendors should be adopting consultative selling to address commoditization challenges.
Security and Identity Management. Employees of TrendMicro, Oracle, Sophos, Integralis, CA, Quest, BMC, HP, Fortinet, Proofpoint etc., may believe their product is better but is it getting across to customers with the right context?
It may be a relatively new market but with so many vendors offering cloud management and automation solutions how does a customer tell the difference between all the big guys in the space including Oracle, VMware, Microsoft, CA, EMC, NetIQ and IBM. What about the other cloud vendors like Rightscale, Splunk, Riverbed, Kaavo; can they take on the big guys and win? We think they can and we would love to help them try?
I talked about QlikTech in Business Intelligence. There are the big players in this market as well including SaS, Oracle, SAP, IBM, Microsoft, Infor, MicroStrategy and Informatica. Lots of similar propositions and capabilities. That makes it tough for Tableau Software, Panorama, Targit, Jaspersoft and others to take a slice of the market.
The market I discussed in depth, ITSM, has vendors of all sizes. The framework players IBM, CA, HP, and BMC swing from focusing on ITSM to seeing it as only a part of a bigger story. The ITSM proposition is potentially being diluted in the proposition of VMware and Service-Now . That should be an opportunity for Frontrange, Serena, LanDesk, Cherwel, Sunrisel and others, but in my view only if they adopt a consultative selling model.
If you are looking for innovative tools to support a consultative selling model or you need some expertise to help your sales team make the change then don’t sit on your hands any longer.