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Excerpt: The Behavioral Advantage: What the Smartest, Most Successful Companies Do Differently to Win in the B2B Arena

The Principles of Behavioral Differentiation

When all else is equal, how do B2B customers choose between competing suppliers? . . . Because competing suppliers look very much alike and offer fundamentally the same products, services, and advantages at much the same price, the customer's final selection decision will not be driven by the question, "Can you do the work?" That question has already been answered. The customer's key question now is, "Do we want to work with you?" and the answer, positive or negative, will reside in what the customer has observed in each finalist's behaviors.

Before exploring this process further, we discuss the fundamental principles of behavioral differentiation:

1. Behavior that differentiates is, by definition, beyond what people normally experience.

We are using the term behavior in its broadest sense: the manner of conducting oneself. . . . In every interaction customers have with someone in your company, they are experiencing and observing how you conduct yourself. Those interactions include face-to-face meetings, telephone calls, e-mail messages, faxes, advertisements, product installations and service, shipments and deliveries, invoices, executive lunches, sales calls, proposals, product demonstrations, maintenance, and inspections. We refer to these events as touch points.

In each of these touch points, the person representing your company makes behavioral decisions, often unconscious, including how he or she greets customers, listens to them, answers their questions, shows them options, explains something, handles a problem or complaint, addresses a need, gathers information, challenges a perspective, solves a problem, communicates, handles conflict, and tries to influence customers. The choices your people make can reflect courtesy, respect, helpfulness, and professionalism; indifference, apathy, and benign neglect; or disdain, rudeness, and outright hostility.

The key point here is that behavior does not differentiate sellers unless it is beyond what we, as buyers, normally experience.

2. Behavior can differentiate both positively and negatively.

As Figure 3-2 illustrates, behavior that negatively differentiates (the left wing of the bell curve) has a repulsive effect on customers. When sellers behave so badly that customers take notice, customers will prefer not to buy from that seller again and will choose other suppliers if they can. Moreover, customers who are treated badly sometimes strike back at sellers by advising other customers not to buy from that seller and even actively campaigning against the seller. Conversely, behavior that positively differentiates. . . . has an attractive effect on customers. It causes customers to prefer to buy from that seller again, so it builds customer loyalty, referrals, and repeat business.

3. Behavioral differentiation applies to employees as well as customers.

Companies that excel at external behavioral differentiation are generally also excellent at internal BD. They treat their employees exceptionally well. It stands to reason that employees who are well treated will be more motivated to treat customers well, and this commonsense assumption is reflected in the fact that so many of the companies that excel at behavioral differentiation appear in Fortune's annual lists of Most Admired Companies and Best Companies to Work For.

4. You are onstage with your employees and customers all the time.

This is a critical lesson. There are no time-outs. Everything you do or say creates a behavioral impression that the stakeholders in your business, including your customers, use to compare you to your competitors and other organizations they have worked with or been part of. . . . Now add the behavioral impressions you create at hundreds or thousands of other customer touch points every day. . . . That's why it's important to manage how your people behave and to consider behavior an important strategic business asset (or liability, if your employees routinely behave badly or indifferently toward customers).

5. Your behavior is the truest expression of your attitudes and beliefs.

You are how you behave, and you behave how you are. Many companies claim that customers come first, that they are relationship oriented, that they value people, and so on, but their behavior often does not reflect those ideals. No matter what you say, your behavior communicates what you actually believe. . . . It's common for people and companies to express lofty ideals, especially during the selling process. After all, everyone wants to make a good impression. But your behavior communicates what you really think of customers, what you consider important, and whether you really want their business. Moreover, the difference between your espoused values and your values in action will almost always be evident to your employees and customers.

6. To customers, your person currently interacting with them is your company.

Some customers may make the distinction between the organization and its representatives, but most won't. They will consider the treatment they are currently receiving from a company's employee to be emblematic of how that company treats customers. As they interact with more employees of the same company, they will develop more individualized impressions (as in "Ellen is more responsive and better to work with than John"), and then their cumulative impression of employee behavior will create their institutional impression. . . . so if you are going to behaviorally differentiate your company, you must find ways to help each employee differentiate himself or herself while interacting with customers.

7. Your behavior is the strongest component in customers' perceptions of you.

As we researched customers' perceptions of suppliers, we learned that more than 90 percent of these perceptions are based not only on the quality or features of the product or service they buy but on the supplier's behavior toward them. Common sense would suggest that this applies more in the B2C (business-to-consumer) world than in B2B, but it's not true. Remember that nearly all of the purchasing executives we surveyed said that supplier behavior absolutely makes a difference in which suppliers they choose to partner with.

8. You can manage behavioral differentiation.

A final important lesson about BD is that it can be managed. In fact, if you don't manage it carefully, it's not likely to occur. . . . To differentiate yourself positively, you must ensure that the people in your company consistently treat customers in ways that are significantly better than the way your competitors treat them.