Why Adding Features Can Lead to Commoditization . . . and What You Can Do About It (Part 3)
Mar 12, 2012
Long ago (longer than I care to think about) my old man summarized it in a single phrase: “A difference that isn’t a difference isn’t a difference.” At the time I was young, and this sounded so obvious I took it as proof that Dad must have gone senile. (Of course the young all know that old people - everyone over, say, 40 - are feeble minded and stupid. Strange how old people get smarter as we ourselves get older, isn’t it?). In the meantime I have learned to appreciate the wisdom of that seemingly simple sentence. I now realize that it is the heart of all marketing. Because no matter what we (the vendors and the partners selling our products) believe, if the customer doesn’t perceive a difference between us and the competition, then there is no difference. And the customer might as well decide on price alone.
In my previous blog posts (Part 1 and Part 2) I described how, paradoxically, increased functionality is leading to greater commoditization, and that this can be explained by the Consumption Gap: technology companies are adding functionality faster than our customers are able to absorb it. Rather than trying to understand how all these new features could benefit them, they simply throw their hands up, decide all products are equal and choose on price. The solution lies in services: the job of the VAR or Systems Integrator is changing from providing product to counseling the customer and creating great results.
The really successful companies in coming years will grab the chance that the Consumption Gap gives them. They will identify new opportunities that the technology opens up to the customer and create new desires. This will differentiate them from other VARs. The vendors will like it, too, because it fills that gap between what the customers think they need and what the products can do. This goes beyond mere “solutions selling” to what I call Vision Selling. Solutions selling is about understanding the customer’s needs and fulfilling them. Vision Selling is about looking beyond the customer’s needs and creating possibilities that go far beyond them. As Bob Dylan would have said if he were in our business, solutions selling knows what you need, but Vision Selling knows what you want.
In some cases, this is going to mean completely rethinking your company’s business plan. At the very least it requires a mental shift away from “we sell products from vendors A, B, and C” to “we sell our networking knowledge and expertise to help the customer implement the right networking solution.” Remember, other VARs and SIs can also sell the products from vendors A, B, and C, and someone will always be willing to take a lower margin. But if you sell your brand – your consulting, your smarts, your creativity – you develop a bond with the customer that goes far beyond the logos on the boxes you install.
So, where are these opportunities?
Certainly some vendors provide more than others. Juniper’s approach to the New Network makes it a particularly rewarding partner for channels that want to engage in Vision Selling. Here are just a few examples of the opportunities Juniper provides:
Develop new monitoring or management applications using Junos Space. You can make use of the built in network discovery and inventory to create applications your customers will value. Or use Junos Space Service Now, which is included in every Juniper support contract, to add value to your customer support, becoming proactive and helping the customer avoid problems.
And notice that I haven’t even mentioned what you may think of as Juniper’s core business: routing, switching and security. The opportunities are endless for you to show your customers a bright future with the New Network.
How are you fighting commoditization in our industry? Why not share some examples of Vision Selling that your teams have already done. I welcome your additions to the conversation.