Archive | Competitive Separation

Differentiation in the Cloud (aka. Differentiate or Die)

In the massively expanding world of virtualised services how can Cloud Service Providers stand out from the crowd and demonstrate that they are materially different? And secondly, how do you explain that your material differences are vital and critical for customer success? This is the dilemma today facing Leaders and Senior Executives at Cloud Service Providers, MSPs, System Integrators, Resellers, Distis and LARs.

So what is the answer to effective Differentiation in the Cloud?

problem-not-solution1. Being Relevant: It’s all about them and not about you. You need to have a deep understanding of your target customers, their challenges, their aspirations and their desired business outcomes from using your cloud services. If you can’t help your customers to “join the dots”, you are not going to have a high growth business. You are going to have to hope that the Customer can work this out for themselves, quantify the results they expect to get and make the decision to buy by themselves. This sounds like a very risky business strategy to me! Never delegate the Buying Decision to the customer. You must decide with them and for them. After all, they may get the decision wrong!

2. Differentiation: 3 Levels of Perceived Value

differentiation_3_levelsLevel 1: The Product /Service. If you are like most Cloud Service Providers you are building your offers on one of several Vendors infrastructure platforms: AWS, IBM or Azure or you are using key technologies such as VMware, Hyper-V, WebSphere or application solutions such as O365, Salesforce.com, CRM online, etc. So the question in level 1 is “how can I differentiate if my technology stack is the same as CSP A, CSP B or CSP C’s stack? Clear the thing that we all want to avoid is differentiating on price.

“Price is race to the bottom that you don’t want to win.”

There is some scope to differentiate using your own IP to create unique capabilities and offers based on the underlying infrastructure and core technologies. Infrastructure enhancements, data center security, usage extensions, custom templates, service bundles, pre-populated parameterisation, bundles and packages fall into this category. But levering your uniqueness in level 1 is limited.

Level 2: Professional Services and Support. Huge opportunities exist here to differentiate your core offers from your competitors and other Cloud Service Providers. Because everything in level 2 is unique to you and your company: your people, processes and systems. Often these areas of differentiation go totally under exploited by Cloud Service Providers and consequently remain unrecognised and unappreciated by customers. Here you have a huge undeveloped opportunity to differentiate in real and relevant ways and to liberate new levels of value for customers. Examples: cloud migration assessment services, on-boarding services, application and data migration services, Migration SLAs, security consulting services, big data consulting services, hybrid architecture consulting services, support services that enable business outcomes.

Level 3: The End2End Customer Experience. What are all those things that you can do as a Cloud Service Provider to deliver a superior experience to customers? By End2End you should be thinking from the customer’s point of view and at any point in the Customer’s Journey from Find, Try, Buy and Consume Cloud Services

Change the direction of your thinking:
Cloud Service Providers think Inside-out:
Product/Service -> Professional Services and Support -> End2End Customer Experience
The Customer thinks Outside-in:
End2End Customer Experience -> Professional Services and Support -> Product/Service

3. Linking your Uniqueness to the Customer’s Desired Outcomes
selling_business_outcomes

The Line-of-Business Buyer seeks three things:
1) Speed-to-use
2) Ease of Adoption
3) Measurable Business Value

 

Also see links to:
Competitive separation post
Workplace Transformation: How to Survive the Cloud slideshare
Sales Transformation: 5 Steps to Capture More Cloud Customers Keynote presentation (video)

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Customer Adoption is the new ROI

Customer Adoption is the ultimate measure of Return On Investment. Period! I hear a lot of people talking about ‘Time to Market’, but I don’t think that this is what they really want to achieve. “Great, we have our new offer in market, but the channels aren’t familiar with it…..yet”, or “customers cannot find it on our website…..yet”, or “we cannot handle orders over the phone…..yet”. So, what is the use?

Time to Market is necessary, but not sufficient.

Time to Market, based on this definition, is a misguided and a delusional goal. A far more meaningful and useful goal to aspire to, to plan for and to measure is ‘Time to Revenue’. The two metrics may be used interchangeably but I would argue that this is a dangerous error. Because the difference between Time to Market and Time to Revenue is Customer Adoption. (see diagram)

Time to Customer Adoption:

“There is more to success than hard work.” – Anonymous

What are the drivers of adoption and what are the barriers to adoption? And how can we align with those drivers and overcome the barriers when potential customers are evaluating and considering purchasing our products and services?

Consumer psychologists tell us that dissatisfaction is the beginning of all behavior. If we were not dissatisfied, we would simply stick to what we have. There would be no need to change what we do. The gap between where we are now and where we want to be is what drives us to make changes in our lives, and of course that is what makes us change the products we own and the services we consume. Geoffrey A. Moore’s work on “Crossing the Chasm” tells us that Innovators and Early Adopters will be cognisant of their dissatisfaction and unmet needs and take positive action to resolve them. Customer adoption then is all about helping the early majority and other post-chasm customers to feel the need and follow the lead of the Innovators and Early Adopters.

People make emotional decisions that they then rationalize and justify with logic.

Success means eliminating Barriers to Adoption:

1. GAIN vs PAIN. If the perceived GAIN is less than 10 X the perceived PAIN, then the effort (also PAIN) to change will be considered as insufficient to be worthwhile. Business Implication: Sell the PROBLEM, not the SOLUTION. Use a diagnostic conversation to help the customer probe for PAIN. Take them to the negative future. Let them ‘wallow in the PAIN.’ Then take to the positive future, to the un-troubled state where they can enjoy peace of mind AND then show them how they can get there with minimum time and minimum effort by adopting your products and services.

2. Align with consumer’s self-perception. Consumers choose products that are consistent with their perceptions of themselves and reject those that are incongruous with them (Sirgy, 1982). Business Implication: Determine what you stand for as a Company, your core values and then align your product, service and company values with those of your target customer groups.

3. Re-frame the Customer’s Perceived Risks:

Uncertainty leads to “no decision”. And uncertainty in business has never been higher than it is today. Business Implication: Cloud Computing and SaaS are a perfect antidote or cure for business uncertainty because they put control back in the hands of the business. As one customer said: “The rate of change in business today really puts you at a disadvantage if you make long-term investments in anything.” That is an outstanding endorsement of the benefits of the Cloud.

Question: What are you going to do to accelerate Time To Revenue by maximising Customer Adoption of your Products and Services?

Read blog post: The Buyer’s Journey Part 2
Read blog post: The Buyer’s Journey Part 1
View slideshare: Customer Adoption is the new ROI
Read Book: Outside in: The Power of Putting Customers at the Center of Your Business

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Competitive Separation*

Competitive Separation is what makes you or your offer unique, unmatchable. The more unmatchable your offer is, the great the level of competitive separation. Step 1. Determine your current level of Competitive Separation. Step 2. Determine your Aspirational level of Competitive Separation and Step 3. Create a plan to get there.

1. What makes you different?

What makes you different? What are your “Crown Jewels”? Why should your customers care about this difference? How can you leverage this difference to capture new customers and enter new markets? And finally, are you going to develop or acquire your “Crown Jewels”?

“Crown Jewels” are your unique assets that are proprietary to you, hard for competitors to replicate and highly valued by customers. They can be technology patents, size of installed base, disruptive business model, domain expertise, skills and capabilities that are unique to your company. That if developed and positioned properly create sustainable advantages that enable real and measurable competitive separation. We all have them. Sometimes we don’t know what they look like or where they are hiding in our organisation.

2. Who is in your Competitive Set?

Most of us live within the confines of our competitive set. A competitive set consists of you and every other company/capability/offer/product or service that customers perceive as comparable or equivalent. ie. Your customers view you as potential substitutes. Do you have a well-worn list of usual suspects that you compete with? Who is in your Competitive Set today? Should they be? Who will be in your competitive set in 3 years from now? Who would you like to include in your competitive set? Continue Reading →

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