In the last article (What’s your problem?), I took a look at the customer in the context of a newly diversified solution. I began to explore what might motivate potential customers to make the switch – or encourage existing ones to embrace a broader offering.
We simplified it down to two powerful drivers: greed and fear. I also considered what you can do to become more ‘diversified-ready’ as you push towards new horizons. Now it’s time to move on a step. I’m working on the assumption that you’re now armed with a diversified customer solution – even if it’s still in its infancy – and, to borrow a phrase from Boris Johnson, it’s pretty much “oven-ready”.
Risk and reward
Raising awareness of a new offering among current clients is often viewed as a logical starting point when launching fresh products or services. After all, introducing innovations to an established customer base – or into established markets – is a key growth strategy of most, if not all, established business models.
According to the well-known Ansoff Matrix (one of my personal favourites), this approach is classed as ‘product development’ rather than ‘diversification’. Even so, it is still widely regarded as the second riskiest of the four options. The boldest – and trickiest – route is selling new products to new customers/markets.
At the other end of the spectrum, selling existing products to existing customers – known as ‘market penetration’ – and offering those same products to new markets (‘market development’) are generally seen as the safest bets. Any experienced business consultant will tell you that you should focus on the first two… well, first.
But given the shifts we’ve seen in the OP market over the past decade, isn’t it fair to assume that most of us are already doing everything we can to maximise both market penetration and market development? This means that product development and diversification have become must-haves.
We’ve previously explored the dangers of selling new products to existing customers – the so-called ‘product development’ strategy. The risk to the customer relationship for any misstep is obvious. But risk also lies in not doing so: someone else steps in, you lose the account – or at the very least the core part of it – and it’s unlikely you’ll ever win it back. So how do we do it?
The direct approach is to tell them through sales conversations, marketing campaigns, quick calls, etc. The number one reason customers don’t buy X from you is usually because they didn’t know you offered it. “Did you know we sell workwear? I noticed you don’t currently buy that from us – can I ask why not?”
And just like that, you’re off. They will tell you why. It doesn’t need to be any more complicated than that. I’ve lost count of the number of times I’ve seen this simple angle replaced by convoluted approaches.
A more subtle way would be to include your range in a customer review – whether as part of a meeting, a document or a regular report. Simply add a line showing how much they spent with you on workwear (or any new category). If it’s zero, let it sit there, clear as day. In fact, put a zero next to every category they don’t currently buy from you.
I’ve heard countless salespeople ask for those zeroes to be removed from a report, protesting: “They don’t buy that from us!” But that’s the point.
Here’s the thing: if you don’t include that new category in your reports, how are you ever going to introduce it to the conversation/review later? When they start buying it?
I’ve sat in some terrific customer reviews where, after the fourth or fifth time of pointing out, “There’s workwear – still showing zero,” the client suddenly says, “Oh, wait… do you actually sell workwear?”
Don’t be offended. It was never important enough before. You weren’t seen as a supplier of that category – even if you’d been mentioning it and marketing it for six months.
Either they didn’t have the need or the motivation (fear is greater than greed, remember) to switch wasn’t strong enough.
Time to review
A customer review meeting or conversation is a golden opportunity easily missed. The art of a good review is not to make it a thinly veiled sales pitch. Nobody likes that. It should focus on reporting and informing – giving the customer clear insight into their current purchasing habits, wrapped in proactive advice on how they can improve. Approach it like that and the reception will be positive and the idea of a regular review will be embraced – and they will not be offended by the zeros or any mention of new categories.
The reason, in my opinion and experience, that Igor Ansoff considers this the second riskiest of the four strategies isn’t because it’s inherently dangerous. It’s because it can take time to deliver results. This isn’t a silver bullet. It’s a slow burn. But once it takes hold… oh boy, does it pay off.
There are also less obvious, but equally valuable, upsides. I’ve seen it time and again: introducing one or two new categories can spark unexpected conversations about entirely different needs – even ones outside your current offering. “No, I’m not interested in workwear,” they’ll say, “but do you know anyone who supplies X?”
We’ve referenced this before – how milk became Anglo Office Group’s biggest-selling product line in under two years (read Steve Gorham’s The building blocks to success – Part II). That opened the door to fruit, catering supplies and lunches… none of which had been on our diversification radar at the start.
What happens – gradually but unmistakably – is your customer starts to see you differently and you reposition yourself in their eyes. I’ve also often seen how presenting an expanded solution reinforces the single-source benefits. As a bonus, it can flush out leakage – those other departments or locations that, for whatever reason, haven’t been buying your core range. Suddenly, they’re then swept up so you get a welcome bump from that too.
Your suppliers
As outlined in Gorham’s earlier articles (read also Part VI), supplier engagement and relationship management were crucial in the early stages of Anglo’s diversification journey. From a sales perspective, those first steps into offering new products or services to existing customers come with a challenge: no track record, case studies, proven success or built-in credibility.
That’s where the supplier relationship becomes critical. Until you’ve established your own success stories, you’ll need to lean on your supplier’s reputation – its case studies, expertise, knowledge and trustworthiness.
It is therefore imperative that your salespeople build strong relationships with suppliers. They need proper training and a solid understanding of not only what they sell, but also who chooses and uses the products (and by that, I don’t mean other distributors but consumers). They should know who the ideal customer is, what common objections the supplier faces and how they typically address them, how the brand positions itself in the market, which entry points they focus on and what success stories they can share.
Your existing customer already trusts you, but that trust doesn’t automatically extend to new categories. They may be wary of relying on you in unfamiliar areas, which is why it’s essential to demonstrate that you’ve partnered with a reputable, proven supplier. Make sure the above is baked into the training, along with knowledge of the supplier’s history, core values, etc. Too often, this is overlooked in favour of surface-level product features and benefits.
Marketing and awareness
There are far more qualified people than me to talk about the multitude of ways to get your message to market in today’s digital age – so I won’t try to. What I will focus on is how a diversified solution unlocks a wealth of possibilities to change the way customers view you.
I’ve already covered a sales-led approach – asking the question, using review meetings and so on (I am a salesperson, after all) – but here I want to highlight the broader marketing potential. A diversified offering gives you multiple new touchpoints to engage your audience with your message and value proposition. So, consider this a gentle plea to the marketeers among you: look at it through a sales lens.
Let me take you back to when Adam Noble was CEO of The Irongate Group and I joined as Sales & Marketing Director. The Irongate Group had two very distinct divisions: office supplies and print. This was my first proper introduction to delivering a successful product development strategy – watching office supplies customers embrace print and vice versa. It also happened to be a period of huge change in the print world, as digital production was beginning to transform the industry. Irongate was one of the early adopters, investing in Xerox’s iGen.
As a complete novice in print (or “print-ignorant Nappy”, as I can still hear Adam say), I was keen to understand the sales message. Why was digital print the right fit for the customer? What advantages did it offer? The standout features at the time were short runs, fast turnarounds and personalisation. The benefits? Lower costs, reduced waste and obsolescence, and higher impact from tailored content – driving better response rates. Wonderful stuff.
And that’s how it was marketed – not just by Irongate but by most players in that space. As relatively early adopters, we knew the market hadn’t yet fully embraced digital print. Customers needed educating. They needed to understand just how beneficial it could be. But the message wasn’t always hitting the right mark. We were presenting “short-run, fast turnaround and personalisation…” as this game-changing, all-in-one solution. And it was. So why weren’t customers jumping at it?
The lightbulb moment came – where else? – in the car park after work. We realised we were over-complicating it. Like many of our fellow early adopters, we were selling the solution as a package deal: “If you want fast turnaround and short-run and personalisation…” But what if you didn’t want or need all three? So we started marketing and selling it one feature (and benefit) at a time. It worked.
Multiple entry points
And that lesson has stayed with me. When we diversified at Anglo, we had multiple points of entry we could market – hundreds, in fact. Yes, the catch-all ‘single source’ solution was even more achievable with a diversified product and service offering, but the capacity to create many more product and solution sales and marketing messages was incredible. The ability to justify ongoing and continuous (yet variable) customer marketing took on a whole new lease of life. Vida Barr-Jones and the team at Focus7 had a field day creating a variety of material and messaging for us.
The salespeople loved it. It gave them confidence to talk about the new areas as the ‘points of entry’ to a customer – existing or new – kept growing. One day it was milk. The next day, fruit. Then document storage and retrieval. Workwear at the next review. And so it went on.
The key message here? You never really know what the point of entry will be when you add a new range or category. And you don’t know when the opportunity will present itself either. We’re all good at selling what we’ve always sold: save money, reduce costs/admin, rationalise the supplier base – but so is everybody else we compete with. The ability to differentiate in our core sector has diminished. Amazon Business is eating our traditional lunch!
Your new diversified solution has just opened up a world of customer engagement and marketing possibilities. It’s not a silver bullet for sales. It takes time, investment and belief. But the opportunity to reshape how customers see you, to reposition yourself in their minds, is there for the taking. What’s not to like?
