Dealing Effectively With the Competition
December 2007"This would be a great business if it weren’t for the competition!”
Unfortunately, the existence of the competition impacts every industry, every business and every sales position. What the competition does or does not do can make a dramatic impact upon a company and a salesperson. That impact can range from squeezing you to the point where you go out of business on one extreme, to creating tremendous opportunities for growth and profits on the other. The competition and their potential impact on your business is a fact of life. No matter how hard you wish, you are not going to be able to make the competition go away.
While we can’t change the competition, we certainly are responsible for our attitudes and behaviors toward the competition. What we say and how we act about the competition can have a daily bearing on our bottom lines. An appropriate attitude and set of practices for dealing with the competition should be an essential part of every salesperson’s repertoire.
This article is an attempt to describe some of the salient parts of that mindset.
Respect the Competition
Speaking badly about the competition, looking down on them, finding fault with them and generally disparaging them are all common behaviors that I see frequently among the companies with whom I work.
It is easy enough to understand why that is. In sales meetings we are constantly told how our products stack up against the competition, what makes our service superior, why our people are more experienced and more knowledgeable than theirs, etc.
In my position as a consultant and sales educator, I am uniquely positioned to test the truth of these positions. I’ve occasionally worked with a company, for example, and then a few years later found myself involved with one of their competitors. Or, I may have two or more competitors in one of my seminars. This unique position has allowed me the opportunity to make observations about these kinds of claims.
One of the observations I have made is this: There is usually some degree of truth in the details of these elements. Your hot new product may have several features that your competitor’s does not have, for example. However, in the big picture, your competitor offers a sound business option to your customers. While your new product contains some features that you competitor’s does not, his product probably contains some features that yours does not. And while you claim your service to be superior, so does he. And your people are probably not more experienced and knowledgeable than his. From the 10,000 foot high perspective, if your competitors were as flawed as you think they are, they wouldn’t be in business, and your customers wouldn’t be buying from them.
In all likelihood, your competition is made up of educated, committed people who are trying just as hard as you are to be a viable option to your customers, to conduct their businesses with integrity just like you, and who strive to do a good job and to provide for their families through the fruits of their labors, just like you.
So, bury those attitudes of superiority, and cast off that disdain for the competition. If your customers didn’t think they presented a viable option, they wouldn’t be buying from them.
Don’t Believe Everything You Hear
We occasionally hear comments from our customers with complaints about the competition or stories of how they messed up on some project. This, of course, contributes to our natural tendency toward smugness by confirming our views.
Let’s take all of that with a healthy degree of skepticism. Understand that the people who share that information with us are typically those customers with whom we have the best relationship—those we consider our friends. What we see as confidential information about the competition’s weaknesses may just be the natural human inclination to tell us what they believe we want to hear. Our friends want to find common ground with us, and our animosity toward the competition provides potentially productive soil to plow.
It’s been my observation that many of those customers who are reporting on the flaws in the competition to you, are reporting on your flaws to them.
Don’t view everything you hear as 100 percent accurate.
Don’t Speak Badly About The Competition—Ever
Disparaging the competition, speaking badly about the company or the individual salespeople—using little innuendos and side comments—all of this says more about us to our customers than it does about the competitors to whom we are referring. It reveals us as small minded, petty, smug and far more interested in ourselves than we are in our customers.
This is something I learned the hard way, in one of the most embarrassing incidents in my tenure as a salesperson.
I was selling a piece of capital equipment, representing a product line that was 35 percent more expensive than the competition. However, the additional cost was justified in a far superior product. The competition had been experiencing a problem with one component of their system—the batteries easily worked loose and disconnected. They solved that problem by using a rubber band to provide additional tension on the battery and keep it from jiggling loose.
I pointed that out to my potential customer—asking them how comfortable they felt with a product that was held together with a rubber band. My customer’s response?
"Do you know what I don’t like about you?” she asked. I was floored and speechless. "You are so negative about your competitors.” I turned beet red, stammered an apology and retreated quickly. That incident has stuck with me for decades.
At this point there is a question that naturally occurs: If I don’t want to speak badly about the competition, how do I present the advantages of my offer relative to the other guy’s?
Here are four options:
Consider the competition’s offer as irrelevant. I believe this approach to be the most effective in the long term, because it focuses on the customer, not the competitor.
If you have done an accurate, detailed job of understanding the full nature of your customer’s situation, and have presented a solution that precisely meets the customer’s requirements, what difference does it make who the competition is, or what the competition does?
The issue is not the competition; it is your ability to meet the customer’s needs. Your mindset, from the beginning, is not a bit focused on the competition, but rather is 100 percent targeted to completely understanding the customer’s requirements. The conversation is not about how you compare to the competition, but rather how you meet the customer’s needs.
Obviously, this approach is not for every selling situation. It requires a commitment on the part of the salesperson to spend time with the customer in order to fully understand his needs. It assumes that you have the ability to shape an offer that meets the customer’s needs. And, it requires a more professional self-image on the part of the salesperson, who sees himself/herself as a "consultant” to the customer. If your routine is limited to asking for the technical specifications and then quoting prices, this approach is going to be outside of your reach.
In the long run, however, it provides the ultimate response to the competitor’s presence in your accounts.
Speak in generalized, not specific, terms. It is more effective and more professional to speak in general terms about the class of competitor than it is to speak specifically about a particular company or person.
For example, if you want to make the point that you favorably compare to X company (that national competitor), say something like this: "Generally, large national companies are more concerned about their own financial performance than they are the needs of the local customers. Since we’re local and family owned, we highly value every customer, and that translates itself into more personal and responsive service.” Notice, you didn’t talk about the competitor, you talked about "national companies”—a general class of competition.
This "generalizing” of the references to the competition provides you a means of pointing out your distinctiveness without being negative about your specific competitors.
Use questions, not statements. It is far more effective to put questions in the customer’s mind that he/she should ask about the competition, than it is for you to make statements about the competition. Remember, your comments are always suspect, because the customer knows that you have a vested interest in persuading him one way or the other. His observations, however, have far more validity to the customer than anything you are going to say.
Understanding that, this practice seeks to help the customer make his own observations by providing the questions that the customer should ask.
For example, don’t say, "Y Company is a small local company that doesn’t have the systems or technology to support you in the long run.” Instead, say, "One of the questions you should ask of every vendor is this, ‘What technology and systems do you have in place to assure that you will be able to support us for the long run?’”
Use tables and charts. This is a commonly used technique to point out the differences between your offer and your competitors’ in a detailed and professional way. Imagine a chart, with the salient features of your offer down the first row, and across the top your company’s name, followed by "Option A,” "Option B,” etc. with the options being your competitors. Then use a check mark to indicate the inclusion of that feature in each company’s offering.
This can be a highly effective way to point out the differences between your offer and the competitor’s. In addition to the detail that it presents, the document itself is often prepared by your company, not by you personally. That means you are one step removed from being the source of this information. The problem with this approach is, of course, that the source of the information is your company, and you are always suspect.
Regardless of which one or combination of these approaches work for you, the discipline to deal with the competition in a professional manner is one of the hallmarks of the best salespeople. Every salesperson should think through and decide on an approach that fits you.
About the Author
Dave Kahle, The Growth Coach, is a consultant and trainer who helps his clients increase their sales and improve their sales productivity. He has trained thousands of salespeople to be more successful in the Information Age economy. He is the author of more than 500 articles, a monthly e-zine and six books. You can join Kahle’s "Thinking About Sales Ezine” online at http://www.davekahle.com/mailinglist.htm.