Selling Against an Entrenched Competitor: 12 Ways to Win Competitive Deals
When you sell into an established market, if you’re going to grow your share, you’ll have to take business away from your competitor. Dislodging an entrenched vendor isn’t easy, but it is possible and I’m going to show you twelve ways how.
Try these tactics next time you hear, “We’re happy with our current vendor, thank you.”
1. Don’t Slash Price
When stealing business, many sales people are tempted to slash price. “I’ll beat whatever price that you’re paying and guarantee the quality, too!” they’ll boast. If you have spare margin to cut your prices below your competitor’s, you’ll be able to take some business, but it’s not a sustainable business model.
Slashing prices isn’t a sustainable business model.
Besides, the competitor probably will retaliate and if you’re going to keep the business, margins will get even thinner.
Better yet, deliver new value instead of cutting your price.
2. Keep ’em Honest
Ask your prospect, “When was the last time you went out for a competitive bid? Top negotiators strongly recommend that you get other bids at least every six months to keep your vendors honest.”
“My customers ask me to keep their other vendors honest.”
“Let me help you keep an eye on the market by asking me to quote your business at least twice a year. Worst case, you’ll have a better understanding about the market price. Best case, you’ll get a better deal.”
3. Spare Tire
Say, “Let me ask you a question. Does your car have a spare tire? You have four perfectly good tires that keep you going, so why do you need a spare? Because you might need it! And you’ll probably need it when you’re short on time and need to get somewhere fast. Well, let me be your spare tire. What would happen if for some reason, your vendor misses a delivery, delivers short, or has a blowout? Well, call me and I’ll back you up. Will you agree to that?”
“Call me when you’re in a pinch.”
And then request an evaluation or certification so that you’re poised when the entrenched vendor slips.
4. What Do They Do Well? What Do You Want to Change?
Try this proven tactic next time you hear, “We’re not looking for any more vendors.”
Say, “Great! I’m so glad that they do everything that you need to your complete satisfaction. I’m always working to improve how I serve my customers. Please tell me, what do you like best about them?”
I know, it might be difficult to say the first time. But, try it, and really mean it! You’ll be delighted at how candid your prospect will be if you ask with honesty.
Keep asking, “What else do you like about them?” until they run out of kind things to say.
Your prospect just gave you a list of their criteria for selecting a vendor. You’ll have to deliver on all of these points, and then some, if you’re going to get a shot at the business. Don’t start selling yet. You have a couple more questions to ask first.
Next ask, “What do you like least about them?” With this question you’ll get the criteria that you need to dislodge that vendor. You’ll find the cracks in their armor that they probably aren’t even aware of! Keep asking, “What else?” until they run out.
Then ask, “If you could have things any way you wanted, what would you change?” These are the good reasons for the prospect to switch.
Next ask, “If you did that, what would that mean to you and your team?” This creates tangible value if they can get what they want.
And finally ask, “What would motivate you to change?” And now you’ll discover exactly what you need to do to get them to pull the switch.
With all of this information, you’ll be able to present a compelling reason to give you a go. “Based on what you’ve told me, you owe it to yourself to give us a try. At the worst case, you’ll have a validated second source. Best case, you’ll get everything on your wish list. When can we start an evaluation?”
5. Second Source
Or tell them, “Great! Then you’ll need a second source, just in case.” Pull out your business card and write, Second Source. Hand it to them and say, “Just put that behind their card in your card file. If they slip up, can’t help you the way you need to be helped, or if their performance slides, call me.”
6. Would You Like to Know How We’re Different?
Most companies believe they know why they are different or better, and they believe that their prospects and customers know why they’re unique and superior. It’s a sad fact: frequently, neither of these beliefs are true.
When you hear, “We’re happy with our current vendor,” say, “Great! Would you like to know how we’re different?”
Why You Don’t Want to Lead with the Claim That You’re Better
Notice that you don’t tell them that you’re “better.” Not yet!
“We’re better!” puts prospects on the defensive. “Oh ya? Prove it!”
“Better” is a personal judgment. Don’t claim that you’re better until you know their criteria for what constitutes better. For example, a fast-food restaurant may be better if you want food in a hurry. A fine-dining restaurant may be superior if you’re celebrating a special occasion.
If your unique points are meaningful, they you’ll be perceived as better than the competition. If they aren’t, then asserting that you’re better destroys credibility because in the prospect’s mind, you are making a false claim.
Identify how you’re different and then determine if those differences mean anything to your prospects. And here’s how you can do that.
7. Your Top Ten Differences List
Prepare a list of ten ways that you’re different than your competitors and share this with your prospects. Your differences must meet the following criteria to persuade your prospect:
- The differences must be relevant to your prospect. If they don’t care, it’s not a point of difference.
- The differences must be specific. Use exact figures because the more precise the number, the more convincing it becomes.
- The differences must be credible and believable. Don’t quote numbers that no one will believe. I frequently see this claim; “We can increase your productivity by 53 percent.” Saying that to a prospect is telling them they’re stupid. You’re telling them that they don’t know their business and you, an outsider, does. Stick to a number that’s smaller and more believable, even when you can deliver those outrageous figures. This is the essence of “underpromise and over deliver.”
- The differences must be provable. Back up your claim with testimonial letters, case studies, and reference accounts.
- The differences must be demonstrable. Do this with ROI worksheets, analysis and assessment tools, and demonstrations.
- The differences must be real. Avoid the “Cheaper and Better” claims unless you can bring to bear strong evidence. You’re better off claiming “Value and Reliability.”
When your prospect agrees to examine your differences, hand them the list. As you review each point, ask if it is important to them. If so, check-mark it. At the end of the list, count up the check marks and ask, “Are these enough reasons to explore us as a second source?” If they say, “Yes!” begin the evaluation process.
If they say “No,” thank them for their time and leave. Then occasionally send your prospect reminders and proof of the points of difference they found useful and wait for the entrenched vendor to fumble and fall.
8. Don’t Convince Them, Make Them a Hero
If you attempt to convince your prospect, you’re going against the grain of their normal behavior. To be convinced, your prospect will have to admit that they were wrong. And you know that prospects hate doing that.
“People hate to admit they’re wrong.”
Your prospect may view switching as an admission that they had the wrong vendor in the first place. Not a politically correct action. So if you’re going to get them to switch, it’s got to be more than helping them save face; you’ve got to make them a hero by letting them do something that they couldn’t before.
9. Upgrade Them
Take the position that choosing you upgrades their strategy. Before you present your arguments on why you’re a better choice, say, “You know that as time goes by, companies make improvements in every area of their business. They upgrade software, improve productivity, and decrease costs. That’s progress, it keeps you competitive, and advances your career.”
“When was the last time you upgraded your vendors?”
“You make improvements by changing processes and procedures. Usually, that means making an investment, whether it’s money or time. And part of that investment in change is upgrading vendors and suppliers. Would you like to know why our customers choose us as part of their upgrading process?”
10. “Why Don’t You Give it a Try?”
After presenting your points of difference, say, “Why don’t you give it a try?” This is an easy way of letting prospects check you out without making a commitment. And right now, they aren’t ready for a commitment to you. Of course, you’ll under-promise and over-deliver, making the switch easy to defend to their management.
11. Make the Trial Confidential
They may be worried that talking with you may damage the relationship they’ve worked hard to establish with their current supplier. So offer to keep the trial period confidential so that they won’t risk any exposure. Just sign a mutual non-disclosure agreement and keep your mouth shut until you’ve earned the business.
12. “You Can Always Change Your Mind”
If they’re still reluctant, say, “You know that you can always change your mind. But try it before you decide. You can’t make progress without trying new things.”
How have you penetrated new accounts? I’d enjoy hearing your tactics.
Mark S A Smith
Working with leaders to bring in the right customers, fast.
P.S. I have two openings for my executive coaching services. If you’d like personalized coaching to help you grow your company with guaranteed results, let’s have a conversation about what we can accomplish. You can schedule time at MarksSchedule.com.
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