Dealing with the competition
In this week’s newsletter I’ll share how I think about dealing with competition in a deal cycle.
You will face competition in almost every opportunity you work on.
Occasionally there may be uncontested upsells or renewals, but in the main you will always be competing against another vendor.
Competition is healthy. It helps you to think outside your bubble.
Think of your mobile phone. At the time of writing, the two main operating systems for mobile phones are Apple and Android.
Consumers make almost fanatical decisions about which camp they are in.
Apple users love the interoperability between other Apple devices, the security, and the beautiful union between hardware and software design.
Android users love the fact that they aren’t tied into a closed platform and that they can purchase from a wide variety of handset manufacturers at varying price points.
These are both good reasons that make sense for each set of users. One product is not better than another, but one product is better for each customer.
You should keep this in mind with your customer. Are they Apple or Android? What is their view on the world and does your solution help them more than the competitions?
When selling to a business there are three main factors that can influence a buying decision.
Who has the better product or service?
Who has the better relationship?
Who has the better pricing?
In the graphic below you can see how these three interrelate with each other and how some unexpected decisions can come along that don’t go your way.
You might think:
We have a better product: But your customer chooses an existing supplier where they have an existing relationship. They are already set up as a supplier and they have preferential pricing.
We have a better relationship: But a challenger vendor comes in with a new product that they are offering at a lower entry price to win the customer.
We have better pricing: But an existing supplier has proven their capabilities in other areas of their business, and the customer is prepared to pay for certainty
What should you do to improve your success against the competition?
Understand who the competition is
First, you need to know what you are dealing with.
As you went through your company’s onboarding process you will have learned about the major competitors that you will face. These will be a mix of larger established companies and smaller challengers that are newer to the market.
By building up your relationships with your key contacts at your customer you should be able to understand which of these other vendors they work with today, and they may even let you know which newer vendors they are considering to solve this problem.
If you are aware of consulting or reseller partners working within the customer, they can be very helpful in confirming who else is in the running.
Empathize with the competition’s point of view
Empathy is the magic word throughout your sales career, and here you want to have empathy for your competitor.
Over at the competition there is another salesperson just like you.
They want this deal just as much as you do.
They believe in their product or service as much as you do.
They might even be reading this article at the same time as you are!
What is their point of view?
Is this customer a good fit for their product or service?
What gaps does their solution have?
Do they have existing relationships that they can leverage?
How does their pricing model work?
Are they already set up as a vendor?
Will anyone ask questions if the customer chooses them as a vendor?
Will anyone ask questions if the customer does not choose them as a vendor?
Your objective with this exercise is not to think of all the reasons why the competitor is a bad fit for your customer but the opposite. What has this competitor got going for them?
Thinking of Apple and Android: Why does this competitor make sense for your customer?
Focus your effort on being the best you can be
Only through thinking from the perspective of your competitor and why they would be a good fit for your customer can you then understand where you need to focus your efforts to counter them.
They have a better relationship – How can you build your senior relationships up quickly? Can you get approved as a supplier while the process continues? How can you link your offering to the senior executive’s initiatives?
They have a better product – Can you focus on your roadmap to give confidence? Does the customer need the extra features your competitor offers? Should you have qualified out of this deal?
They have better pricing – Can you offer flexible payment terms, or shorter contracts, or bundled pricing?
And of course it is normally a mix of all three.
Your goal should be to focus on all three elements to ensure that in the customer’s eyes you have the best product or service, the best relationship, and the best pricing—a combination that any competitor will find impossible to challenge.
That’s it for this week, I’ll see you next Saturday!
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