If you can’t explain why your solutions or your organisation are different from competitors, then you may find you can only compete on price. Differentiation is essential to the process of creating positioning that articulates the attractions and advantages of your solution and of working with you. Failure to differentiate means you will lose competitive edge and face a challenging future with an inevitable race to the bottom.
At a recent seminar on NFV and SDN, hosted by European Communications, Neil McRae, Chief Network Architect of BT challenged equipment vendors to tell him why they are different. Many solutions have broadly similar functionality and solve the same sets of challenges. If there is nothing different about them that differentiates one from the other then, he said, he would choose the cheapest – which would be a certain Chinese vendor “by a country mile”.
That’s a brutally honest assessment. Clearly, not all network operators will have the same view, but it is still an important point. All vendors and solution providers need to be able to identify what makes their offers different. Differentiation is essential. It gets to the essence of what you offer.
As far as we can see, there are two problems here. First, many vendors choose to focus on traditional values, such as throughput, specification compliance, performance and so on – in other words, typical features from a product requirements document.
But features are not enough to be interesting. The second problem is concerned with how many operators force vendors to focus on minutiae. In any RFX process with an operator, most participants will support most of the required features – and, if they don’t, they probably can if they become mandatory requirements. But this process rarely creates room for expressing key differentiators that are actually important to the solutions in question. Vendors need to be absolutely clear about what makes them different, either at the level of individual solutions or as an organisation, or better still, both.
Because of the legacy of formulaic RFX processes, few vendors make such efforts. They remain focused on their products and do not consider how they should position solutions to capture the essence of what makes them different. If they are not different, then they will simply be treated as commodities and, as Mr McRae says, the cheapest will prevail.
That’s why a bit of introspection is essential. It’s increasingly hard to compete and there is a wealth of innovation to be found. In competitive markets, identifying and clearly building propositions around your differences can provide an edge – and an edge is what you need for sustained competitive advantage and performance.
The lessons are clear – it’s not easy to change operators’ purchasing tactics, but it is relatively straightforward to identify and develop stories that accentuate what makes you different. If you can’t already articulate this clearly, then you probably haven’t thought it through and need to invest time in doing so. We’ve met vendors that struggle to do this, because they believe their differentiators to be complicated. If it’s too complicated to explain, then no one will ever understand it.
If you can, then you need to make it fundamental to your propositions and ensure the differentiating factors are given appropriate prominence in verbal and written communications. And, if you haven’t already recognised the absolute necessity of doing so, then perhaps you should talk to us and see how we can help.