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All Roads Lead To Differentiation

by David Yockelson  |  October 31, 2016  |  Submit a Comment

At first blush, service providers – as distinguished from tech providers or vendors that create, market and sell software or hardware products – have a tough problem: how can they make their services stand out among a huge set of competitors that all do the same basic thing: supply resources that substitute for clients’ lack thereof. OK, maybe it’s not quite that simple, but service providers (SPs) offer development, supply chain management, human capital acquisition and a myriad of other resource-intensive services meant to augment or supply capabilities for areas in which clients are deficient. Because of that, SPs don’t have traditional “speeds and feeds” to rely upon to describe and/or to differentiate what they do and how they do it. This often causes problems for marketers and sellers since prospects are continually confronted by a dizzying array of potential competitors.

We’ll come back to the particular problem for SPs in a moment…but it’s helpful to understand that differentiation is an area in which MANY tech providers need help. Even those that do have speeds and feeds to rely upon often rely upon them too heavily, mistaking “faster” and “friendly” and even “AI-enriched” (one the latest and most popular technology elements to espouse) as differentiators. But whether one is a product or service provider, there is a set or series of content components to consider for effective messaging. This set includes:

Information – basics that can include identifying elements such as market space, vertical focus, etc.

Education – content that informs prospects about why the provider’s space or offerings are relevant and necessary to the market; what pain or gaps exist?

Position or Solution – Explaining how the pain or gaps described in the market can be solved by the provider and its offerings; accompanied by benefits that accrue to the customer and (when applicable) the customer’s customer.

Differentiation – why the provider’s offerings are uniquely (or far more effectively) able to address the pain than the way prospects are going about it today.

Thought Leadership – Blazing new trails with advice and/or product/service offerings that build upon the position and differentiation.

In reviewing any given sales deck or web site, I can typically find at least three of these. Some providers need to educate more than others (a bot provider today likely must educate prospects on their value); some are in better positions to be thought leaders given novel inventions or vast experience. Information is expected, as is positioning and statements about solutions (i.e., product and service descriptions related to the pain or gaps felt by prospects). But differentiation is often harder to come by. Sometimes, a provider is to steeped in its features and capabilities to remember that those alone don’t differentiate. Well OK, an amazing new feature that is unique is differentiable, but only in the context of how it solves a problem more effectively for the prospect. A wonderful new feature – “We have machine learning at our core!” – is meaningless without providing context – business context, ultimately – for its wonder.

Let’s get back to service providers. As noted, they have a challenge because most often, they are supplying resources to customers such as people, labor, techniques or automation, and the temptation is to lead with discussions about how the same are respectively smarter, cheaper, newer or faster. But because those could easily be applied to any competitor’s offerings (whether true or not), they’re meaningless as differentiators. So what can SPs hang their hats upon?

The secret is in how those resources are applied uniquely by the SP. Methodologies can be key differentiators — has the SP found a better way to wring cost out of MRO procurement by linking sourcing strategy to offshore suppliers and off-site warehousing? Does the SP transfer DevOps knowledge from its agile experts to in-house IT staff more effectively through collaborative platforms? There are many examples that illustrate the value of methodology. Additionally, are there geographic and time advantages based upon where resources are located? Are there payment schemes or offerings that prospects will find more friendly than “blank check” SOWs? Are there key assets that the SP has developed that give it an edge over competitors that continually build from scratch? One tip is to ask customers what THEY value from their experiences – they will often phrase benefits obtained in ways that differentiate from competitive and in-house methods (secret: this tip works for product providers as well). Ultimately, those levers that a service provider can pull to uniquely deliver value for its customers are its key differentiators.

Category: digital-business  go-to-market  gtm  services  

David Yockelson
Research VP
1 years at Gartner
30 years IT Industry

David Yockelson is a Research Vice President on the Tech Go-to-Market and Sales Strategies team in the Technology and Service Provider Research organization.. Read Full Bio

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