To avoid the pitfalls of competing on price, salespeople are often told they need to “sell the value.” Another strategy is to “value-add” by offering the customer extra services or product features without charge. While these strategies can be effective short-term, neither of these approaches produces a sustainable advantage. Selling the value implies that the salesperson either truly understands what the customer values, or that the value offered is perceived as significantly different from the competing offerings. All too often, neither one of these is true. At the same time, a value-add strategy has its own drawbacks. While it may sometimes win a sale, it produces customer expectations of “free stuff”; it also erodes margins and may be easy for the competitor to match.
Salespeople rely on these strategies, ineffective though they often are, because they find it difficult to achieve genuine differentiation based on something the customer values and is hard for the competition to replicate. But suppose a salesperson were able to create a highly differentiated offering that provides real value competitors can’t copy because it is unique to the customer? The secret lies in going beyond features and services that are easily commoditized and developing what Ted Levitt called “the potential offering.” Salespeople can achieve this kind of differentiation by looking beyond their product to all aspects of the customer’s experience across the whole process of buying and using a product or service.
The Customer Life Cycle, as it is sometimes called, provides a lens for understanding the experience at four critical phases, from buying the solution through the end of its useful life. Each phase offers an opportunity for an innovative salesperson to find sources of differentiation.