It's Not Always the Product.

Anyone I've spent time with over the past couple of months has heard me talk about "The Challenger Sale," by Matthew Dixon and Brent Adamson of the Corporate Executive Board. I talked about their underlying research in a post last October, and have been carrying around my dog-eared and well-highlighted copy like it's The Book of Mormon. While the research and the book focus on the broader world of sales (the empirical study included over 6,000 sellers from 60 industries), there are several insights particularly useful as we try to clarify the world of online advertising and marketing. Here's one.

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Online salespeople frequently point to the lack of product innovation as the reason they're not making more sales. If only our product had feature X or function Y...then they'd buy from us. This can often begin a damaging cycle of rushed product improvement or feature activation which achieves only parity with some competitor's point solution. By the time you "innovate," either the competitor has also innovated (and pulled away) or the buyer simply moves the goal posts and tells you there's something else wrong or deficient about your offering.

Dixon and Adamson studied this issue. They wanted to find out what drove real customer buying loyalty in B2B environments like ours. "Product and Service Delivery" -- which includes the feature sets of your products -- accounted for just 19% of customer loyalty. (And to those of you who think it must then be all about price, think again. "Value-t0-price ratio" drove just 9% of customer loyalty.) The reason why our "New and Improved" products don't engender loyalty? Customers just aren't focused on the details in the first place. "Over and over we found that customers, generally speaking, see significantly less difference between us and the competition than we do ourselves," they write. "So while we spend much of our time emphasizing subtle differences, customers tend to focus first on the general similarities."

So trying to win long term loyalty through product innovation turns out to be fool's errand. Turns out that our customers are often just playing along with our own obsession with feature comparison. So then how does one create a sustainable loyalty advantage? Through sales process innovation. 53% of customer loyalty can be traced back to "Sales Experience." Specifically, suppliers who consistently made some combination of seven moves pushed loyalty numbers through the roof (italics are mine):

  1. Offer unique, valuable perspectives on the market
  2. Help the customer navigate alternatives
  3. Provide ongoing advice or consultation
  4. Help the customer avoid potential land mines
  5. Educate the customer on new issues and outcomes
  6. Is easy to buy from
  7. Has widespread support across the customer organization

Dixon and Adamson put it very succinctly: "Loyalty is won out in the field." Customers are telling us that how you sell is quite often more important than what you sell. The natural inclination in almost every field of endeavor is for sellers to immediately say "Well, that can't be true for our business!" I beg you to reconsider: it's absolutely true for our business, and those who fail to reinvent their sales process accordingly will find themselves forever nibbling on the edges of commoditization.