Published by : Frederic Lucas
In B2B sales, when we talk about competition, we tend to think of competitive companies that offer products, services or solutions similar to ours.
That view is limited, and it impacts closing rates.
There are two other forms of competition. If they aren't taken into account, the sales process is incomplete and ineffective.
Competitor #1: the status quo
The status quo is the most underestimated competitor. In fact, most salespeople are entirely oblivious to it.
Inaction is often the default mode of operation for companies because, without an incentive to act, the perceived risk of change is greater than the discomfort of the current situation.
What usually sets representatives on the wrong track is that they can't distinguish between the search for solutions and the decision to act. However, just because a prospect enquires about a product or service doesn't mean he or she is ready to buy.
In fact, very few are.
How to challenge the status quo?
1. Identify a problem and quantify its cost
Very early on, the sales process must allow for the identification of a real problem to be solved by the decision-maker.
A step later in the process should be the quantification of the problem's cost. In other words, calculating how much inaction costs to make the prospect realize that he/she needs to act on the issue.
2. Identify the compelling reasons to buy
In addition to the previous steps, the sales process should highlight the compelling reasons to forgo the status quo by allowing salespeople to ask their prospects the right questions. These compelling reasons can be professional, financial, personal and other consequences (or opportunities) that the decision-maker will face.
These aren't arguments that representatives can provide to help make a decision but instead factors specific to each and his or her context.
Concurrent # 2: other initiatives and priorities
Business resources aren't unlimited, and until the order form is signed, the budget planned for your project can be "kidnapped" and allocated to other priorities. Since it's impossible to have a global vision of all the client's projects or issues, it's always risky to assume that your project is the only one or the only priority... it never is!
The more you are in contact with a senior decision maker, the greater your chances of seeing your process through to the end without seeing the project delayed.
How to deal with competing initiatives or priorities?
1. Identify the compelling reasons to buy
The more the decision-maker understands what inaction entails, the more likely he or she will be to move forward without being "distracted" by other priorities.
2. Have real money conversation
As the table below indicates, a whopping 65% of representatives can't talk about money - surprising but true.
Let's be clear - merely asking "What's your budget?" at some point during the sales process isn't having a conversation about money.
To adequately address this critical issue in the sales process, you need to understand where the money will come from to buy your products, solutions or services. Does the company have the funds? If not, can they come from another source and which one?
3. Create urgency
The less time you give the potential client to decide to do business with you, the less chance you have of your opportunity going away.
It isn't a question of putting pressure to get a quick signature but instead, raising the awareness of what's at stake when delaying the decision. At closing, by bringing the cost of the problem identified earlier back to the table, the sales process helps the potential customer to act.
Competitor # 3: the companies in your industry
As I mentioned in the introduction, this is the only competition taken into account during most sales processes. Generally, sales departments know these competitors, their specificities and their price positioning.
Ironically, this familiarity is what often leads to mismanaging the competition and starting the sales process with what representatives like most - presenting - which turn sales conversations into sales pitches and product features discussions.
Instead of allowing salespeople to differentiate themselves, these conversation resembles all other sales conversations that turn prospects off, and the decision usually ends up being made on price.
How to manage direct competitors?
1. Work on sales posture
In sales, being memorable is the result of a good sales posture, i.e. all the actions and the attitude the salesperson has towards his/her prospect.
A representative becomes memorable when he or she is no longer seen as a mere salesperson, but as a trusted advisor. When potential clients see a trusted expert, they no longer feel threatened, and a bond of trust is established because they understand that the representative isn't there only to sell products or services at any price, but that he/she wants to find a solution.
Competition has many facets, and it is necessary to know that they are generally all present. That is why a sales process must be impeccable and allow the sales team to address all its dimensions adequately.