What Is Your Competitive Edge? With Jose Palomino

Posted by John Livesay in podcast0 comments

 

Do you know what your competitive edge is? It’s what sets you apart from your competitors and attracts customers. In this episode, Jose Palomino, CEO of Value Prop Interactive and expert in value proposition, defines what competitive edge and how you can determine what it is for your business! He gives tips on making the most of your operational advantages and turning them into customer magnets. Want to learn more? Jose also discusses The Competitive Edge Program, which walks people through designing, deploying, driving, and getting those incremental wins that set you apart—in less than 12 months. Find out more about Value Prop’s powerful new program and how it can help you win more business!

—

Listen to the podcast here

 

What Is Your Competitive Edge? With Jose Palomino

Do you know what your competitive edge is? If you want to get some insights on how to define it, then this episode with Jose Palomino, who’s an expert in value proposition, is for you. He said, “Not only do you have to show that you’re saving time and money but you have to show how you’re reducing the hassle of the whole experience as well as reducing the risk.” Enjoy the episode.

—

Our guest is Jose Palomino, who’s the CEO of Value Prop. He’s helped over 100 business-to-businesses unlock over $250 million in new growth. He’s got decades of experience helping these business-to-business owners work through and overcome their strategic marketing and sales challenges. He’s also the author of the foundational book Value Prop and host of The Revenue Throughput Podcast. He holds an MBA and teaches candidates strategic marketing management. Welcome to the show.

It’s great to be here, John. Thanks for inviting me.

Let’s go back to your own story of origin, Jose. You can go back to school, college or your youth. How did you get interested in business in general and specifically, finding your niche in B2B?

That’s a long story, so I’ll give you the very short version of it. I didn’t start out knowing I wanted to be in business. I wanted to be a comic book artist. I was a comic book collector. I started taking courses in some of the New York City-based where I was born and raised, art schools like Parsons and FIT to learn anatomy and things like that. I was doing that but meanwhile, I didn’t pay the rent or even buy a bag of chips. I have to figure something out. I started working doing whatever. It led to me working in back-office operations for a major brokerage house.

I had a real affinity for numbers, processes and working hard. I learned at the age of 20, 21, what it meant to bang out work if you had to do it. That became something where I said, “I will never be outworked.” I could be outsmarted maybe, but I won’t be outworked. Everyone wants to say it’s a four-hour workweek, this and that. The reality is most of successful people know how to work hard when they have to work hard. That journey took me into starting a business a couple of years later, notably in selling comics to collectors.

[bctt tweet=”Be innovative, indispensable, and inspirational.” username=”John_Livesay”]

Through that, I had to learn programming to build an inventory system on one of the first IBM PCs that were available. That’s how I got into technology and business entrepreneurship. Since that journey, I ended up mostly going into IT-based companies, ended up working as an analyst working for some large IT companies, including one very large computer manufacturer. That’s when I transitioned to sales and marketing. I moved into sales roles whilst carrying a bag as it were. I didn’t look back from there.

What’s interesting about your background to me, Jose, is you have toggled back and forth between sales and marketing. You were CMO, as well as being a sales director. I don’t see a lot of people doing both. They usually pick a lane and stick with it. Sometimes as you probably know, marketing and sales don’t get along so well at big companies. There is a lot of pointing of fingers. What a wonderful perspective you bring to your clients. What is the big myth that you think is out there those salespeople have about marketing and vice versa?

A lot of them are based on some facts. Maybe it’s not a myth but a real belief. Sales think that marketing is only concerned with aesthetics, the look of the brand, the material, stuff like that. You’ll hear statements like this, “They don’t get it.” Marketing’s thinking like, “We’ve given these guys and gals everything they could need to be successful. Why aren’t they putting points on the board?” You have this sense from both sides, especially those who are in large companies where those things get very siloed shortly. The reason we are not getting to the top of the mountain is because of the other guys.

Success has many fathers. If we’re kicking butt, then everybody’s happy, high fives all around. The stress points are always when things are a little bit not great and you have to figure that out. What’s changing is the move, especially in larger companies. The technology towards what’s being called account-based marketing will come downstream, which is account management for large accounts. They have to give it a new name and so on.

There’s going to be an increasing melding of those disciplines. Things that used to be seen as strictly marketing activities, salespeople have to be good at. The big change there, John, I see is this. Marketing by definition, has a longer time horizon as they look at things. They have to look at a 1-year, 3-year plan or maybe the 6-month plan if they incorporate things like event marketing and things like that. They have a schedule for the future.

Your sales team, on the other hand, in a lot of organizations, have to live week by week. I’ve seen multibillion-dollar companies have a weekly stand and deliver calls on the pipeline. A salesperson is thinking, “I got to make this stuff happen now.” The marketing person is saying, “We have to make this thing happen this year.” That’s the disconnect. Until they understand that one feeds the other both ways, that’s when you have that separation. It’s a hard thing to crack.

I’ve worked with companies where within different sales divisions they’re siloed. Marketing is pulling their hair out saying, “Why aren’t we growing an existing client with another division but the other divisions have no clue what the other ones are doing? There are no even intros being made.” That’s B2B and law firms. It’s this lack of cross-selling and marketing. We don’t need to keep spending the same money if we already have a relationship with a client, a hospital or whatever the industry is. I see that as a big problem that I’m guessing you might have some ideas around solving.

It all comes down to this, especially sales, more so than marketing. Marketing folks with formal marketing titles like chief marketing officer, director of marketing, so on usually have some very small or no variable compensation in their package. It’s very negligible if it’s there at all. Gunning for raises is what you’re doing.

Sales is all about variable comp by and large, still in B2B. If you tell me there’s a sister division that has a great product that would be useful for my customer, the first question I’m going to ask because I’m carrying a bag is, “How will I get paid for that introduction?” “You got to be a good corporate citizen.” That’s fine. I agree. I should be a good corporate citizen.

Meanwhile, I tell my boss that when he’s hammering me to hit my goal, unless you’re going to give me a goal and align me to it financially, I’m incentive to ignore it no matter how well you tell it. I’ve seen bosses from the front of the room. “We’re going to bring the year synergy. This is a year we bring it all together. We’re going to deliver the total value to our customers.”

I say, “Yes, but your comp plan doesn’t reflect any of that.” Salespeople are always going to say, “You can tell me whatever you tell me but whatever the comp plan says is what I’m going to do.” In substantial, you want people to be good corporate citizens and high in integrity. Those are the things that you don’t pay for in a general sense.

This is the thing I always emphasize when I probably work with sales teams. In an average selling year, you have at most 220 selling days in a year, 55 selling days a quarter, 17 per month. It’s rough math. If you asked me to use up 2 or 3 of those 17 selling days in a month, you’re cutting into bone. Unless you’re going to give me some either quota relief on the other side say, “We need you to focus 20% of your time here,” reducing your quota, that’s never going to be the way it’s going to go. It goes the other way.

You’re not going to get the behaviors you think you should get. No amount of fist-pounding is going to get a few. You can try to browbeat people. You got to bring alignment and say, “What’s in it for you?” It is the question you have to answer for your customers but you have to answer that for your internal stakeholders as well.

Let’s bust another myth. I see a lot of sales management saying, “These reps are doing well. He or she killed it. They exceeded their quota. Let’s hire another salesperson and break that territory in half, then we’ll get even more.” The rep is furious. The myth is, “Let’s hire more salespeople to get more sales.” You say that’s not true. Tell us what you mean.

[bctt tweet=”Show your offer reduces hassle and risk.” username=”John_Livesay”]

Especially in the mid-market, it’s different if you’re talking about a company that routinely has 100 territory reps like billion-dollar companies. If you’re owner-led or in the mid-market, you’re a $10 million, $20million, maybe a $50 million company, maybe you have 8 sales reps. You are attracted to that kind of thinking because you’re thinking, “I don’t have to be a rocket scientist to say if I have 10 people and add 1 rep, that’s 10% growth. It should be.” The challenge I would say to that leadership team is this. If you hire the right or wrong person, you’re going to be into it for $100,000, $150,000 in costs, all of that, plus the possibility of deflating your top performers.

There are all these negative things that can happen but I’m not saying never hire a salesperson. The reason you’re looking to hire salespeople is because you’re having some struggles and you think you need to increase sales. You say, “I need to have more coverage.” Then I would say, “Take a look at your sales process first and the other moving parts of your sales continuum from the customer’s point of view.”

Are you sharply focused on your right target market? Have you thought through of your value proposition in the last year? Supply chains are still being stretched. That’s very different than what the world looked like years ago. Have you rethought your value proposition in that context? Have you thought through your lead generation? Things are changing. Things that work technique-wise, LinkedIn blasting don’t work anymore. Emails work differently. Trade shows as a strategy. Does your industry still have its trade show?

Until you ask those questions and get at, “Do I have my house in order?” It’s like your house is laid and being built. You say, “I’m going to add some carpenters to it.” Maybe it’s the plumbing that’s holding you up or the electrician. Maybe you’ve had bad weather and having another carpenter means another payroll. That isn’t going to get the house built any faster. You have to get to the root of it before you start designing solutions.

 

Also, are your current sales reps doing things the way you think they should have? You look at how they do things. Are they making customers happy? Last but not least is critical, especially where we are where supply chain and expectations are being all over the map. People don’t know what to expect. If you said yes to all of the above, are you delivering successfully on your promises as a company? That will unwind sales. That makes people that were loyal customers go back into the markets and say, “I got to find a different solution.” This happens time and again.

Adding a salesperson could be the exact right thing to do but not until you’ve checked off. It’s a few things, value prop, target market, your marketing programs, are they creating the leads for you? Are you delivering on your promises? Do you have a sales process? If you bring your sales team into a room with a whiteboard and you say, “Draw our process,” if they’re drawing like customer calls, we call back, make proposals, sell the deal, that’s not a sales process unless you’re purely transactional and you’re selling paperclips.

A lot of challenges that I hear lately in the marketplace, especially since the pandemic, in the healthcare industry, where pharmaceutical or medical equipment reps, talk to doctors between surgeries, especially if the rep is allowed in the surgery. Bought by the office, drop off some Starbucks and catch the doctor between patients, that’s gone. I don’t see it returning anytime fast.

These are people that have never been trained on how to formally request an appointment or they have to present on Zoom and not in person. There are all kinds of obstacles that people are having for the first time in their career. Do you have some insights into that? Do you see that happening with your clients?

Here’s the thing. Probably within the first six months of COVID becoming a real thing, from March of 2020 towards the fourth quarter of 2020, there was a sense among many people I talked to that when we get back to where we were. That isn’t happening and we see that with workers not wanting to go back to the office. I talked to one sales team that had huge success. They’ve embraced and leaned right into it. It’s all Zoom all the time. They were like a ten-person team. They saved $500,000 on their travel budget. It’s real money. It’s a big organization that scales.

[bctt tweet=”The reality is most of the successful people know how to work hard when they have to work hard.” username=”John_Livesay”]

Here’s the other thing. A lot of customers are saying like, “It’s okay. I don’t need to spend three hours entertaining somebody when we can have a half-hour call and get to the thing of it.” I’m not saying face-to-face doesn’t matter. Relationships matter. All those things matter. The reality is they mattered at the beginning of a relationship. They matter less over time. Have you ever seen the old Ed Sullivan show? There’s a lot less energy needed to keep the plates going.

You’ve got trust built up. If you’re delivering on your promises, you’re in good shape.

You don’t need to do all of that. I would say to that team, “Whatever it is that’s keeping you from what was normal to you years ago, go with a blank sheet of paper and say, ‘If I landed from Mars and I had to make a living doing this job, what would I say is possible within what I see with my eyes, not with my nostalgic eyes?’” Your eyes will get you in trouble. You’re hoping for something that may never come back.

Always think about it this way. Where are you now? This is very often overlooked, John, but where are your customers? What do they want? How do they want to be dealt with? That’s the thing you have to zero in on. How does the buyer want to buy? We can’t give a buyer a script and say, “When I say this, you say that,” if it were that easy.

The traditional way of a sales funnel is you reach out to somebody, develop a rapport, maybe set up a meeting to do some needs analysis or they send out an RFP that describes what the needs are. I’m hearing more often that clients are less willing to share what their needs are. It’s on the RFP or we’re interested to talk to you but we don’t want to spend any time sharing what our challenges are or our pain points. Is that the lack of time or is it not even a trend? What are your thoughts around that?

It is a very big trend and it depends on the category. For example, if an executive is looking to hire an executive coach, they’re going to open up and have a much more open dialogue because they want to see how they feel about that. That’s one example. Let’s say I’m buying a 3D printer for manufacturing. There are $300,000 machines available from three different manufacturers. My expectation is I can totally investigate, get the specs, see the testimonials, the machine and operation online before I talk to anybody. Further, I expect that a salesperson can look me up on LinkedIn. They can look up my company website and they should know.

Let’s cut to the chase is going to be a more common theme. You’ve hit on something very strong and true, John. Chit-chat is going to be far less. I know that people will say, “How are you going to build a relationship?” You build it through trust. Trust means that you say what you mean, you mean what you say and you deliver on what you promise. That’s what a buyer in an industrial B2B category is most looking for. “Can I count on you?”

From that, you earn the right to say, “I’m glad we got this 3D printer installed. There are some other applications that we’re finding some clients are having success with. Can I ask you a few questions around your situation to see maybe there’s something there that you can use and save 20% of production time?” All of a sudden, a person says, “Sure, because you made me look good.”

 

As much as sales veterans don’t like this, the buyer is increasingly at the wheel of the process. They probably always were but we felt like we could do Jedi mind tricks. We could set up funnels. We’re running through people through stages and stuff. The buyer is saying, “No, I’m not having any of that.” They’re not playing along any longer. Sales teams that adapt to that reality will do well. Those that try to squeeze the buyer back into the nice, neat submarine of stages and stuff like that, you’re going to find a lot of kicking back.

You talk about getting back to some basics, which is making sure that the sales and the marketing messages fit the value proposition. Do you have an example of a company that has a great value prop and maybe one that didn’t? That would be helpful. We can talk about the confusion that can happen with marketing and sales don’t understand it.

I’ll give you two quick examples that might help frame the idea of what value proposition is. At the end of the day, value proposition is the idea that answers the question, “Why should anyone buy X from you at Y price?” It’s not the tagline. The tagline comes from a good value proposition. It’s the actual truth. I always say, “Stay true truth your business or your product line if you have multiple product lines.”

I had one client that delivered home heating oil. That’s a declining market. That’s existentially threatened. There’s nothing you could do about that. You can’t do anything to the oil itself. Automatic delivery of heating oil is done on the basis of a timeworn algorithm that all the oil companies use. It allows them to figure out when Bob McAllister is going to run out of oil out of his 285-gallon tank. There’s no Wi-Fi or anything like that. It’s all done through this algorithm as usage, weather, dewpoint, things like that.

This company, a client of mine, was having a lot of overtime runs because they had to do last-minute runs on a Saturday, so it costs a lot of money. They commissioned a superior algorithm. They spent a lot of money on it. I asked him about it. I said, “How’s that worked out?” He said, “We did 60,000 deliveries.” I said, “How many did you miss?” We’re supposed to be exact. He said, “9 over 60,000.” That’s like 99.999. I said, “Is anyone even close to you?” “No one’s even close.”

We started marketing a no run-out guarantee. We said, “If we let you run out of oil, we will fill the tank for free at our expense.” That’s a big thing. 285 gallons is $4 or $5 a gallon. It’s a lot of money. They were able to do that confidently. What ended up happening is they acquired, as a result, the higher end of that market. Even as the customer said, “I don’t want to tolerate any risk of me having a cold winter night where my oil company lets me run out of oil.” We were able to turn an operational advantage into a marketing and sales advantage.

[bctt tweet=”You have to get to the root of it before you start designing solutions. ” username=”John_Livesay”]

Another company in a totally different category, a pure B2B, made a machine that mixes powder. They’ve had it for years. There are lots of companies that do this, but they have unique technology and they are like the best-kept secret. The person who bought the company did very well, operationalizing, efficiencies and how they build a machine. We realized something talking through it. I said, “This machine does what the alternative technology would require three machines.” You need one to do the same thing and it does it like twice as fast. Those are huge advantages that they have to take forward.

They did a lot with video on their website. They promoted this one-stop-shop advantage and sure enough, the company has grown. It’s done very well. The principle of what makes a good value prop is a lot of things. In my book, Value Prop, I talk about I3. It says, “Is it innovative? Are you bringing something new to your market? Is it indispensable? Is it useful over time? Is it inspirational?” Is your execution something that somebody in the trade would go, “That’s pretty cool how they did that?”

Somebody not at a trade may find that very boring. That looks like steel. They don’t care but somebody in the trade would take it. I’d also say there are four things from a selling to marketing perspective that is essential for any value proposition to be effective in B2B. There are four things that buyers are always going to look for. “Can you save me time? Can you save me money or make me money? Can you reduce my hassle factor?” Especially in times like this, where everything seems like a drag and a hassle. “Can you reduce my risk?”

“I don’t know you and I’m buying you a 3D printer. I’ve never used your model before. What assurances do I have? What if you don’t perform as well as your demo say you do?” You have to look at those four things in your value proposition and your promises to the customer. You have to say, “This is how we’re going to save you time, money, hassle and risk.” If you can do that, you’re going to win a lot of business and at least get an at-bat.

What I love about that is most people are talking about saving time and money. If you’re the one that’s talking about personal issues like what keeps you up at night, the hassle factor is, “I can set it and forget it. I’m done. You’re in.” It’s all that kind of stuff because it’s an emotional buy even if it’s B2B. Those are some emotional solutions that you’re giving to someone. Is this making my life easier or harder?

We’re in the process of shopping for a new refrigerator. We had a built-in. It’s getting old, so we need to replace it. I said, “You’re going to take it out of my house?” They said, “We don’t do that.” I’m thinking like that’s like half the solution. What I want is the new refrigerator in the spot where the old one was. I don’t want to deal with the 250 pounds, all refrigerator, having to dispose it and call people up. Make sure that whatever you’re offering your customers is a complete answer to their question, not half of it. If their thing isn’t quite as good as yours but they solved my whole problem, they’re going to get the business.

 

You were generous enough to offer a free gift, which is your book to the readers. What websites should people go to get the free book?

Our book has been on Amazon and still on Amazon in hard copy but if they want and I’m happy for them to have a PDF of the book Value Prop, it’s available at ValueProp.com/book. They can download a free copy of our foundational book for our programs Value Prop.

You’re also coming out with something new to give people a Competitive Edge because I’m always dealing with clients that say, “We feel like we’re drowning in a sea of sameness. Everyone sees this as a commodity. “Give us a little hint about what that is.

The Competitive Edge takes value prop to the next level. It’s saying this and it’s a powerful thought, especially in the mid-market, “Not every company is going to be able to create Apple.” They’re not going to be able to create the next Google. It’s reality. You’re a $20 million company making a small machine or apart. You’re not going to be the Apple.

Think about the Olympics. In the Olympics, the winner wins by a fraction of a second but they get the entire gold medal. They don’t get a fraction of the gold medal. They get the whole gold medal. In B2B, especially in the mid-market, when you win the deal, your competitor did not. They don’t make you share the deal.

If you lose, you might get a phone call that sounds like this, “You were close. We liked your proposal.” You try to tell that to your boss, “We were close but you can’t cash.” The Competitive Edge program walks people through how to get those incremental wins that set you apart at a very practical level in your day-to-day competition. To find out more about it, we have a nice page set up to describe the details of this program. It’s at ValueProp.com/edge.

I hear a lot of clients say, “We’re tired of coming in second place when we pitch against our competitors.” Unlike the Olympics, there’s no medal and money for second place. What a great way to frame. Let us all zoom out a little bit and figure out what is the value prop. Put yourself in the other person’s shoes. I know that this book, PDF and this additional edge will help a lot of people start closing more sales and get along with marketing better. Thank you so much, Jose.

It’s my pleasure, John. Thanks for having me.

 

Important Links

• Jose Palomino
• Value Prop
• The Revenue Throughput Podcast
• ValueProp.com/book
• ValueProp.com/edge
• Better Selling Through Storytelling Method Online Course

 

Wanna Host Your Own Podcast?

Click here to see how my friends at Podetize can help

Purchase John’s new book

The Sale Is in the Tale

John Livesay, The Pitch Whisperer

Share The Show

Did you enjoy the show? I’d love it if you subscribed today and left us a 5-star review!

• Click this link
• Click on the ‘Subscribe’ button below the artwork
• Go to the ‘Ratings and Reviews’ section
• Click on ‘Write a Review’

Love the show? Subscribe, rate, review, and share!

• Here’s How »

Join The Successful Pitch community today:

• JohnLivesay.com
• John Livesay Facebook
• John Livesay Twitter
• John Livesay LinkedIn
• John Livesay YouTube

 

Tags: B2B, marketing and sales, marketing management, sales funnel, Sales Process, value proposition