The dream of higher demand and margins

With higher demand, you could choose the assignments that are a perfect fit. In this dream, every assignment results in quality delivery, happy customers, and nice margins. And every assignment builds even better conditions for the next one; you’re practicing all the right skills, creating valuable references, and building financial slack to reduce stress and do your best work.

Yet, in the real world, you often find yourself taking on assignments that are only almost a fit. Ending up with customers who are only almost satisfied. And as a result, you’re spending way too much energy on damage control, battling customer dissatisfaction, low profitability, or stress from rework.

You’ve probably tried everything to fix this: boosting sales and lowering prices to increase demand, updating processes and skills to increase quality and customer satisfaction, and revamping brand and marketing to increase market fit.

While these initiatives might seem efficient and deliver results quickly, they're rarely effective and sustainable in the long term. Best case: they patch some problems. Worst case: they create a downward spiral that's very hard to break.

No, to fix this long term you have to address the root cause: a lack of differentiation! Simply put (not to be confused with simply done) you need a differentiated value proposition: a promise to your customers that is crystal clear AND you need the ability to keep that promise consistently.

Achieving this is easier said than done. You probably had all the right intentions. And when you were approached by almost—but not quite—the right customer, you did what every good business representative does: you listened and you adapted. However, over time all that adaptation diluted your once great and differentiated value proposition.

To reverse this downward spiral you need an answer to the questions: What problem do you solve, for whom, how, and why should they choose your solution? And then you need to continuously improve your ability to live up to that promise!

Communicate the promise, sell it, deliver on it, make customers happy, learn and adapt, communicate it, and so on—in all eternity!

Once the spiral is reversed—and only then—it might be a good idea to boost sales, update the brand, and all of that.

Should I also lower my price, I hear someone ask. Well, sure! If you want to undo all the hard work you just did, that is.

If you want to learn more about differentiation for B2B service companies, start by reading this article, then follow up with this article.

Anders Wengelin
CEO, Partner and Management Consultant