In this e-Newsletter:
You would not go out to play the big game or fight the big fight without first knowing who your opponent is. Selling is no different. Taking the time to determine who your competitors are for each sale will enable you to develop the best possible strategy for closing the sale.
If you are not aware of who the competition is, and what their strengths and weaknesses are, developing your sales strategy is simply a guessing game. Without knowing what areas to focus on - the areas where you are strong and the competitor is weak - you run the risk of playing directly into your competitor's strategy. You will also create more objections for yourself unless you take a strategic look at your competition.
There are four critical areas that must be addressed when analyzing the competition:
1. The first area that you look at is the competitor's strengths, and you look at them particularly as the customer would perceive them. This means that if the customer thinks of the competition as having a high quality product, then it is a strength; even if you know that their product is not high quality. If the customer believes something to be true, then you must treat it as though it is true. Part of what makes this so important is that many of the objections that you encounter in the sales process will come from the areas that are perceived to be your competitor's strengths. Continuing with the quality example, if the customer perceives the competition to have exceptional quality, it stands to reason that you will hear objections related to the quality of your product.
2. It is for this reason that you look at the second area: ways to offset the competitor's strengths. If their strengths are going to cause objections, you must know what you offer that can defuse that objection. It may be that it is a case of 'me too'. If, for example, the competition has excellent quality, but you do also, then the offset is simply to agree that yes, quality is important. Sometimes though, the competitor's strength is not one that you share. For example, they may have a very low price. When their strength is price, you have to find something similar on which to base your offset. In the case of price, it is often true that while you do not have a low price, you do bring greater value. Most strengths can be offset with some careful thought. On the rare occasions when a strength is encountered that you do not possess yourself and that you cannot offset with some similar quality, you must use the remaining two areas of the analysis to counterbalance.
3. When you look at the areas where they are weak, you are beginning to develop a strategy for selling against this competitor. Areas where they are weak and you are strong become the basis for what you sell to the customer. It is important to remember that, although this can be applied to product features, it is best applied to how your competitors and you do business. Unless there is something about your product that is truly unique, the key points on which a customer will buy are not product related. Things like size, track record, flexibility, innovation and how easy it is to do business with you are the types of things that will set you apart from your competitors.
4. As you examine the fourth area, your strengths, remember that you are looking specifically for areas that correspond to their weaknesses. The reason for this is, if you are selling a strength that is also a strength of your competitor, it will not differentiate you in the customer's eyes. By focusing where you are strong and the competitor is weak, the decision to use you and your product becomes much easier to make. It is not uncommon for people to find new ways to offset the competitor's strengths as they work through the process. Do not hesitate to go back and amend earlier pieces of the analysis.
By spending a little bit of time analyzing the competition, you will derive two major benefits. You will be better prepared for the objections that arise on any given sale. In fact, by knowing in advance which objections are likely to be expressed by the customer, you can often times prevent them all together. The second benefit you get from doing competitor analysis is that you are better able to differentiate yourself from your competitors. This can equate to quicker sales, more sales and higher margins.
For a more in depth look at doing Competitor Analysis and how to apply that information to your sales process, sign up at Learn Selling Online.
Stories From the Road
I recently had the opportunity to spend some time on the road with a young sales professional. He knew his product, he knew his company and he knew his spiel when he got in front of a customer.
He knew everything in fact,
except why someone should buy from him. He was in one of the industries,
he told me, where there was no real difference between the top two or
three competitors. I assured him that there was more difference than he
realized, and that with a fairly small amount of effort, we could find
those differences and develop them into selling points for future prospects.
He looked skeptical but gave
me the benefit of the doubt. Later that day, we sat down at his desk and
he got out two sheets of paper. On the first piece of paper I had him
list his ten best customers. We defined best as those who were the most
loyal, caused the fewest problems and with whom he felt he had strong
relationships. On the same sheet of paper, I asked him to list the two
or three things he thought were most important to them. There were some
accounts that he was not sure what they cared most about, so I told him
to give it his best guess.
Once he had completed the list,
we went down it together. For every entry on his list I asked him the
same question, "Can they get that from your competitor?" Whenever
he said yes, I crossed that one off of the list. If they can get it from
the competition, then it isn't really a reason to stay with you. Once
we had edited the list, he transferred it to the second sheet of paper,
leaving space for notes between each customer.
The next morning, he started calling each customer on the list and asking him or her about why they did business with him and what benefits they received from the relationship. By explaining that the survey was part of a continuous improvement project (which it was, his improvement) he was able to get a fairly good response. In many cases the answers that he got from his customers matched what he had listed and in many cases they didn't. All of the new information was added to the sheet, and anything that he had listed that they did not agree with was crossed off.
The exercise took about two hours of his time and accomplished two things. The first was that he called his best customers and reconnected with them. By focusing on the benefits that they received he was able to strengthen his relationship with them and build positive attitudes. The second accomplishment was the list.
After all the editing, adding and crossing off he ended up with 11 items that his customers viewed as reasons for doing business with him not one of which had been a part of his sales strategy before. Using that list, he was able to refocus his conversations with prospects and better differentiate himself from his competition.
For more information on differentiating yourself in a competitive marketplace, visit our website at SalesHelp.com.
And, as always, let us know how we can help you achieve your goals.
Thanks for your feedback.
Sales Process Team
Dr. Bob DeGroot