Buying anything requires change. It may be as simple as having to replace your refrigerator, or buying a new car and having to deal with the hassles of selling the old one. While a minor change has taken place, the new car and the new refrigerator are pretty much the same as the old ones. This type of change is called continuous innovation. The buyer is not required to change behavior to gain the benefits of the solution. Think about how long it takes to get the benefit of a new refrigerator that is twice the size of my current one, using half the energy? No time at all. As soon as I plug it in, I gain the benefits of the new refrigerator.
When the buyer must change behavior to benefit from a solution, this change is called discontinuous innovation. Most companies that provide value-added services require some form of change on the part of the buyer in order for the buyer to benefit from the solution. If your solution represents a new system (technology or otherwise), it requires behavioral change. If your solution requires training of some sort, it requires behavioral change. If your solution requires the buyer to see or understand a “new approach,” it requires behavioral change. If your solution involves a “ramp-up” time for the buyer to experience results, it probably involves behavioral change. To determine if you provide discontinuous innovation, ask yourself: Can my customers and potential customers fully benefit from my solution if they do not change aspects of their behavior? If you answer ‘yes,’ you are probably providing continuous innovation. But if you answer ‘no,’ then your sales approach must be aligned with the buyer of discontinuous innovation.
WHY PEOPLE BUY DISCONTINUOUS INNOVATION
The process of selling continuous innovation is different from selling discontinuous innovation. With the former, the focus is on features, benefits, and incremental improvement. The latter is driven by the “pain” the buyer is experiencing. Imagine Consulting defines pain as: an opportunity for improvement of an undesirable condition caused by something working sub-optimally.
The decision to buy something that provides discontinuous innovation is driven by the level of dissatisfaction that potential customers are experiencing in some aspect of their lives. A company offering discontinuous innovation faces four major challenges when presenting its solution to potential buyers:
First, potential buyers may not be aware of, nor fully understand, the problems they have;
Second, potential buyers may not share the problems they do know they have with the selling company until they trust the company, and they won’t trust the company until they believe the company understands the potential buyers’ problems better than the potential buyers do;
Third, potential buyers may be unaware of the cause of their problems - and if they don’t adequately understand the cause of their problems, they may be unable to understand the value of the solution your company provides;
Fourth, potential buyers may be unaware of the costs associated with their problems, and therefore may be unable to adequately value the solution your company provides.
These four challenges are the primary reasons potential buyers, accurately qualified by your company, either fail to buy or delay buying. Having a process designed to enable your salespeople to lead potential buyers to understand their problems, the cause of their problems and the cost of their problems, will lead to buyers who are not only buying more quickly (thus providing your company economic benefit), but who are up and running faster (thus making the service experience better and easier to handle). An additional benefit is significantly increased referrals.
RISK IS AN IMPORTANT ISSUE
There is a relatively low risk when purchasing continuous innovation. Discontinuous innovation, though, involves risk on the buyer’s part. Buying a value-added solution involves risk. Among other risks, buyers risk their financial investments, they risk the time they put into implementing the solution, they risk looking bad to their company or their colleagues, and they risk the possibility that your solution won’t work for them. The buyer (and/or the buyer’s organization) may fail to make the change necessary to gain the benefits of the solution. Additionally, because of the change required, the buyer doesn’t have any experience that indicates the solution will even solve the problem. The decision to buy your solution should be driven by a buyer’s understanding of his/her problems – not by a buyer’s understanding of your company’s features and benefits.
HOW TO PREVENT COMMODITIZATION & INCREASE YOUR MARGINS
In today’s hyper-competitive world, discontinuous innovation is a necessary ingredient in differentiating yourself, providing added value, and increasing the profit you make for each sale. Discontinuous innovation is not something to shy away from – it is something to embrace. The challenge when building a business based on discontinuous innovation is developing and implementing a business development model designed to support it. If the sales side of your business has you frustrated, if you feel like your margins are being squeezed because of commoditization, or if your sales cycle times are increasing, it is likely that your business development model is not adequately aligned to your value offering.