Industry Fact

Competitive differentiation is one of the greatest challenges for Sales and Marketing. A recent study by Sales & Marketing Management shows that 73% of CMO’s have little confidence that their value propositions actually reach their customers. Other studies suggest that only 10% of sales people are successful in communicating value propositions consistently. At first glance, this may appear to be a typical problem for the sales force, but in fact, both Sales and Marketing are key in establishing competitive differentiation.

 

Competitive differentiation 

Every commercial organisation aims for a strong competitive position. Therefore, they need to be able to define the unique proposition of their offering, based on the pains and needs of their target market. This message is focused and continuously communicated by means of an effective distribution strategy.

In practical terms, however, only a minority of companies succeeds in maximising their potential by actually standing out from their competitors. Typical challenges facing Marketing Executives that are striving for competitive edge include: 
 

  • Sales people use product-centric messaging
    instead of differentiated value messaging supported by evidence 
  • Sales people make little use of tools provided by marketing
  • There is insufficient knowledge within the company about
    the business challenges and buying criteria of prospects
  • The market segmentation and communication used
    are not generating enough quality leads
  • The selling process is not geared for repeating successes
  • The market tends to opt for the supplier with the lowest price
  • Marketing and Sales are not aligned

    Graphic: Goals most threatened by poor alignment

Our customers implemented the following capabilities

Perpetos supports their clients to differentiate in a competitive market. Our customers implemented the following capabilities:

  • Understanding the competitive landscape
  • Defining a unique value proposition based on the customer’s challenges/pains
  • Aligning their market segmentation with these challenges/pains
  • Differentiating based on customer value instead of product superiority,
    through buyer-aligned messaging
  • Positioning the company as a ‘thought leader’
  • Working with Sales and developing tools they can put to immediate use
  • Sharing best practice

The result

One of our clients reported the following results in the year after implementation of the capabilities stated above:
 
  • 51% revenue growth, compared to 20%-25% in the previous years
  • Profit grew 10% faster than revenue
  • Added value per employee increased from less than 150K€ to 208K€
  • 91% conversion ratio from pipeline to contract
  • Time to productivity for new employees decreased from 13 to 7 months

Graphic: Goals most threatened by poor alignment
According to a study by Sales and Marketing Management, over 60% of marketing and sales people surveyed identified ‘inability to differentiate value’ as their number one concern. The cause is the gap between Sales and Marketing and the effects of that gap on the product roadmap.



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