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Cartoon: in retrospect, John's idea to sell toasters via the cloud was not a good one.

Sales Model Differentiation

By Jeffrey Baumgartner

A great way to differentiate your product or service is to create an original sales model. Salesforce, Amazon and Dollar Shave Club are successful examples of sales model differentiation. Let's take a look at what each of them have done.

Software as a Service

Salesforce has been making customer relationship management (CRM) software since 1999. Nothing special about that. Loads of companies sold such software then. A lot of it was really good. What made Salesforce unique was that they did not actually sell their software, as nearly every software company in the world did at the time. They made it available on the web (via "the cloud", we would say today) on a subscription basis. Customers no longer had to buy, install and oversee upgrades of enterprise software. Small companies and even independent professionals could afford to use the software. And payment is over time rather than upfront.

This software a service or in the cloud or whatever you want to call it seems boring today. But in 1999 it was a novel concept and one that differentiated Salesforce from many companies with similar products. Their niche has been so successful, it has become the norm today and nearly every software company offers at least some of their products as a service

On-line Bookshop

In 1994, there were gazillions of bookshops in the world. Big bookshops, little bookshops, specialist bookshops and more. But when Jeff Bezos decided to set up a bookshop, he put it someplace brand new: the world wide web. Instead of browsing and buying books in the shop, Amazon customers could, and still can, browse and buy books on the web. Today, on-line shops are so normal even my mother buys from them. But Amazon truly differentiated not only from bookshops, but most shops, when it opened for business more than 20 years ago.

Razors in the Post

Dollar Shave Club sells perfectly ordinary shaving razors and blades. What makes them interesting is that they sell razors and blades through the post using a subscription model. You pay a monthly fee and you get fresh, inexpensive blades every month.

What About Your Sales Model?

How about you? Could you differentiate your sales model? If competing businesses sell their products, could you rent yours as a service? If you competition sell in shops, could you sell over mobile phones via an app? Could you give your product away and make money through advertising? Could you come up with a business model where you pay your customers to take your product? Now, that would be different!

--

 

Erps-Kwerps, Belgium
August 2016

 

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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium