For many decades, we have lived with the myth of the rational human being. We have tried to compete with rational arguments and by developing products and services that are faster, more efficient, longer-lasting, more powerful and cheaper than those of our competitors.
Today we know that almost all of B2B decisions are driven by emotional and subjective factors, and by subconscious decision-making processes. Rather than focusing solely on making the product better, there is much to gain by focusing on improving how the product is perceived. In other words, it is often more important to shape customers perception of us and our product than it is to improve the product itself.
An interesting example is Coca-Cola, one of the world’s most successful brands. If you wanted to challenge Coca-Cola, how would you do it? The rational approach would be to create a better product at a lower price, thereby offering greater value to the buyer. In other words, develop a drink that tastes better, costs less, and perhaps even comes in a larger package so consumers get even more value for their money. So far, no one has succeeded in doing this, despite the fact that Pepsi consistently performs better in blind tastings.
But today, Red Bull is seriously challenging Coca-Cola by doing basically the total opposite. In blind tests, Red Bull receives some of the lowest ratings ever recorded in the beverage category. It is sold in a much smaller can, yet it costs more than a regular soft drink.
Why is that? Logic tells us that a product that is significantly more expensive and tastes considerably worse should not be able to compete with Coca-Cola. But we are not rational, analytically logical decision-makers.
Instead, our subconscious creates unspoken interpretations such as: “If it’s sold in such a small can, it must have a much stronger energizing effect than other drinks”. The taste itself reinforces this perception. Red Bull tastes like medicine. And a medicine that is more expensive and tastes worse is often perceived as being more effective.
There is much we in B2B can learn from the way Red Bull has established its product in our subconscious minds. What perception do you want your customers to have of your brand? What should they think and feel when they compare you with competitors? And what are you doing to create and enforce that perception?
If you are a market leader, you many times have an advantage from the start. Some years ago, a new machine technology broke into one of our customer’s markets, driven by their competition. When the leading journal made a survey about who customers saw as leaders using this technology, 90% pointed at our customers who still hadn’t applied the technology. But since they were market leaders, customers perceived it so.
If you see the value in differentiating by perception and to become the Red Bull of B2B, let’s take a discussion. Just reach out to ulf@sfinxagency.se
