How to Compete with an Established Vendor with Good Service.

As we discussed last time, a new vendor is judged on quality and a current vendor is judged on service. Hence, the new vendor must stack his/her quality against the current vendor's quality. So, the new vendor must create a value proposition that not only shows the quality of the service. It must also undermine the service of the incumbent. A common approach is to position one's service as at least as good and one's quality as better. This attempts to neutralize the service advantage, but it falls into a trap. As we discussed, the client doesn't value a new vendor's service. So, unless the offered service is much more compelling than the current service, this won't work. An easier way to do this is to cast doubt on the quality of the current vendor. This approach can be effective when it makes the client choose between quality and "mere" service. This is a risky position for the client, and it can produce a vendor change. Of course, this approach works only when you can convince the client of the high-quality of your service. And this is where the value proposition comes in.