Why Technology Companies Need More Than Innovation to Differentiate Themselves and Win More Business
There is the great Glengarry Glen Ross quote: “ABC – Always Be Closing.” In the technology sector, there is: “ABI – Always Be Innovating.” However, with the high costs of research and development, demand dependent on a slowing economy, and limited access to capital, the ability to “always be innovating” is difficult to realize for most technology companies.
As a result, today’s emerging mantra may be: “It’s not always about what you sell, but how you sell and what you say that makes the difference.”
Many tech companies have relied on R&D to differentiate themselves from their competitors by developing new products and improving old ones. Companies like Intel and Microsoft typically spend 15% or more of their revenues on R&D. The problem, however, is that with greater competition, tinier windows of differentiation and a slowing economy, these companies can no longer count on innovation alone to set them apart.
No Decision Crisis
Also, customers are postponing their technology purchases until the markets stabilize. Since tech products are often updated older versions, they can be the first to go when a company cuts its budget. In fact, up to 60% of forecasted deals end up dying as a result of the customer choosing to make no decision at all. The issue is not having a better product or service than the competitor, but rather customers don’t see enough reason to do something differently.
What’s really happening is that your customers are not deciding between competitors, but rather they are trying to determine if there is even a need to change. While most of your money spent on R&D goes toward developing new features and benefits that defeat your traditional rivals, the real, true battle is against the customer’s status quo. As a result, your current messaging and R&D efforts are not doing enough.
In the customers’ eyes, all options look the same, and they do not see enough reason to change to anything different. Therefore, instead of spending large portions of the budget trying to convince prospects to choose you over your competition, you must re-allocate time and resources on the 60% that are not choosing anyone or who are indecisive.
Most technology companies are entering into a competitive bake-off of features and benefits — talking about “why you” or convincing the customer “why us.” Meanwhile, the real questions customers are considering are “why change” and “why now.” This requires an entirely different approach to your messages, selling tools and sales training.
If you want to grow faster than the market, it’s not a matter of having greater innovation than your competitors have… it’s also not about stealing customers from your competitors. It’s about helping your customers overcome their status quo. Your real competitor is the status quo. Your job is to actually help your customers make the decision to change, before you help them make the decision to choose you.
Learn how to overcome the status quo barrier: http://win.corporatevisions.com/Do_Something_Different_IS.html