Read an Excerpt
Chapter 5: The Direct Strategy: Making a Frontal Assault on the Competition
Variation Three: Product Linking
A third derivative of the direct strategy involves situations where you already have a strong presence in an account. As new sales opportunities arise with the customer, you may be able to gain competitive advantage simply because of the strength of your installation, even if your products have begun to lag somewhat in sophistication and capabilities.
If you own a videocassette recorder, the odds are it's a VHS format machine. Now, imagine that. you decide to buy a second VCR, one to hook up to the television in your bedroom. When you go to your local customer electronics store, you find a VCR at a very good price that has some great new features. There's only one problem: it works in the Beta format. You can' buy this machine at a great price and get those terrific features, but you won't be able to use it to watch all the videotapes you already own.
If you're like most people, you wouldn't buy this unit. Instead, you'd buy another VHS deck - even if its price may be a little higher - because the incompatibility between VHS tapes and a Beta deck defeats the purpose of convenience that set you on the buying path to begin with. There's a link between the product you'll buy and the one you already have.
Beyond convenience, most business customers want to achieve a fairly high level of stability from the products and services they acquire from vendors. They want these products, in effect, to become invisible - to become such a normal, integral, and effortless part of their operation that they do not distract attention from the demands of business. So here you are, the incumbent vendor, and your customer is about to make an acquisition to expand their installation. Unless a competitor's product will be fully compatible with what you've already installed, with no cost to the customer in terms of conversion or retraining, you have a built-in advantage and can go direct by linking the buying decision to your existing installed base. All the tangibles are working in your favor.
You also have intangible factors working for you. Even if an account is considering bringing in a niche vendor to solve a specific problem, the customer will be working with you on the bigger issues in the future. 'Mat's an important relationship, one the customer is equally responsible with you to protect. Senior managers in companies today more and more often recognize how the quality of their products can be improved by working with as few vendors as possible, and to establish strong relationships with the ones they rely upon. As long as your company markets a range and line of products that will serve disparate needs, you have a situation where your product mix will allow you to virtually own an account as it applies to the kind of solutions, you have to offer.
In one of your accounts, if your company has been the established supplier for some time, and if no other company can offer a product that is compatible - and if this is critical to the customer - the choice for your strategy in new sales opportunities with them would very likely be the product linking variation of the direct approach. In all of your efforts, you would address the decision makers' expressed needs, but would also emphasize the positive aspects of "staying the course." From time to time, you would gently bring up the prospect of a disruption in the customer's operation should another vendor be brought in.
Two things must be true for this version of the direct strategy to work for you. The first one is obvious: the customer must be satisfied with the product or service they've already received from you. After all, linking your sales efforts to a failed installation is roughly equivalent to celebrating having survived the Chicago fire by taking a cruise on the Titanic. The second requirement is that customers must conclude, perhaps reluctantly, that their attraction to another supplier isn't worth the drawbacks of having a multi-vendor environ-ment. If it's a toss-up, your presence in the account shouldn't lull you into thinking you have an edge....