Selling Innovation in a Commoditized Market

Selling a new innovation or a new concept is hard. You can see what your clients need. Your company has developed products and services to address that need. You have the ability to deliver amazing results.

But your clients are resistant. They don’t get it, or they’re not prepared to change.

So they ply you with platitudes, “This looks amazing, but it’s two years ahead of what we need.” Or some other compliment veiled as a brush off.

The issue is not one of innovation or customer understanding. The issue is branding — positioning an innovation requires a different approach.

Three modes of selling

There isn’t a one size fits all approach to branding and business development, because there are three distinct sales models:

  1. Aggregate Market: Selling to existing customers. They know you, like you, and they know how to buy from you. This market can also be more receptive to new ideas, because there is already the seeds of trust.
  2. Established Market: The second mode of selling is to an Established Market. These are traditional products and services that companies are already using: office supplies, computers, accounting services, and so forth. These are known quantities, and do not require CEO approval to make a purchase.
  3. New Paradigm or New Concept: The third mode of selling is for a New Paradigm or a New Concept. These are products and services a company has not purchased before. These purchases require executive decision, and are often transformative for the business.

Selling an innovation falls under a New Paradigm or Concept model.

An example of buying modes

For the purposes of new business development, let’s focus on the second two modes: Established Market and New Paradigm/Concept.

Social media is a good example. From 2004 to 2010, social media was a New Concept. Companies didn’t understand how to use Facebook, Twitter, and other platforms to market their services.

CEOs and business owners were going to conferences to learn about social media. They were hiring social media experts, and investing in social media strategies and concepts. They were buying a New Concept. The consultants sold to the top of the organization, and they sold strategically.

Now, companies get social media. It has transitioned from a New Concept to an Established Market (a commodity). The CEO doesn’t need to be involved in hiring social media experts. He can delegate the decision to a marketing manager or another operations staff.

Once a company understands a product or service and has purchased it, they become educated buyers. The purchase is no longer a New Concept or a New Paradigm.

Comparing Apples to Oranges

Branding in an Established Market is about differentiation: how are your products or services unique to alternatives in the category. It’s a question of differentiating apples from apples.

A New Paradigm or Concept has a different branding challenging — it’s apples to oranges.

When Salesforce.com launched in 2000 it was a New Paradigm in the CRM industry. It was the first cloud-based or software-as-a-service customer management application for businesses. Salesforce led with a bold positioning statement, “End of Software.”

Salesforce.com embraced the paradigm shift in its industry, and made it the defining factor of its brand. Salesforce.com wasn’t focused on comparing its features to traditional CRM systems. It was about how the product was categorically different.

Lead with purpose

Peter Drucker wrote, “Business has only two functions — marketing and innovation.”

Embrace innovation, and sell it with purpose.

Why is your company’s innovations important? How are your products and services different from traditional options? Why is it a New Concept or New Paradigm?

Traditional approaches to sales and marketing are not effective for selling a new innovation. Instead, focus on the brand — brand the innovation to sell.