Competition RISK

Competition is one of the key elements to consider throughout a sale cycle.

Competition comes in several forms :

  • Do nothing. It’s common, particularly in high-tech sales for customers to value what you are offering, but fail to proceed because the complexities and cost of changing are too great. Often these are intangible and outside of your direct control. For example, many companies stick to a CRM or accounting package that may not be the best in the market but because they have so much invested in terms of data, processes, and systems they are reluctant to change.
  • Good enough. Your product may be highly innovative and bring great capabilities. The customer perceives a lower-cost competitor’s solution is good enough to meet their needs and go with it instead. This can often be driven by a perception that while they need to change they don’t need much change.
  • Direct competitors. These are competitors targeting your space, perhaps with the same or different feature set and very often you come up against them time and time again.  In all situations and in particular, where you are more expensive, you must show differentiated value to the prospect. By this, we mean that you must show clear blue water between you and the competitors (with capabilities that the prospect values).
  • Indirect competitors. These are alternative ways of achieving the same result other than your solution. The problem with indirect competitors is that they are harder than direct ones to compete against. You need to be mindful that there may be other ways prospects can address the problem you are targeting. Differentiated value and moving the deal forward fast are very important when competing against indirect competitors.

Amplifying Factors Industry Location

RED – Behind the competition

Once you’ve ascertained that you are behind the competition you need to consider if we need to disqualify yourself from the opportunity or if you believe that you have strong differentiated value that is relevant to your prospect, you need to requalify and re-present the value of your solution.

AMBER – Level with the competition

A bit like being behind, level is not where you want to be. This says you haven’t shown your differentiated value to the prospect and you need to be clear to show the prospect how your solution better meets their needs. Be careful not to oversell, confuse them and give the impression that competitor offers them a better solution for their needs.

GREEN – Ahead of the competition

This is where you want to be. This implies the customer sees your differentiated value and that you’re a good fit for their solution. You must build on this rather than sit back and assume that they will move forward with you. If you are ahead, your competitors are behind and you don’t how they may react.

Mitigation – what to do ?

As described above showing differentiated value is the key to beating your competition. You need to not only reflect value as in show them you can meet their needs today also add value by showing that you can bring extra that is relevant to them to help them to drive their business forward, reduce costs, et cetera This is what we mean by differentiated value and it’s very important for dealing with competitors.

Velocity is your friend when dealing with a competitive situation. Once you’ve moved to the place where customers is telling you that you are ahead of the competition, you now need to move quickly rather than slower. Work out with them what they need to do to conclude the business and create a mutual plan together to get you there. This way you keep control of what’s happening and prevent competitors from gaining or regaining momentum.

Look for where you can lay out traps for your competitors. If you know you have a capability that differentiates you from the others, make sure you really emphasize that with the prospect and get them to build that clearly into their needs. So for example if a solution is quick and easy to get up and running, emphasize disruption, business training time for staff, adoption, et cetera et cetera so that they will understand that your solution is a safer solution to go forward with. In the early days. This was a great example of how cloud-based technologies, won against on-premise solutions as the time to value was much shorter.

References from Happy Customers particularly ones that have selected your solution over your competitor are great assets in competitive situations. Someone who’s been there, and bought “your T-shirt” is your best advocate in a competitive situation.

Don’t directly knock the competitors. Prospects don’t like that and it can work against you in a tight situation you personally lose trust and rapport with the prospect. 

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