How have you trained your sales team to talk about your competitor with a potential customer? I see companies take different approaches from refusing to acknowledge the competitor exists to taking every opportunity to throw them under the bus.
I think there is a better approach.
When it comes to talking about competitors, there is an alternative framework that you can use to help your sales team start winning deals immediately and to create a sustainable long-term advantage. This framework can be a small adjustment for some leaders and feel entirely unnatural for others. Either way, I’m confident that adjusting your approach can lead to outsized positive results in the long run. Before I talk about this tactic, let’s first review two of the most common techniques and why they aren’t the best approach.
Competitor? What Competitor?
If a potential customer inquires about a competitor, they have already done some research and have likely formed an opinion about you and your competitor. There is a reasonable chance they have already spoken to your competitor and might have developed an impression about your company based on input from your competitor. Even if they don’t directly ask about your competitor, you should assume they will find your competitor by doing a simple “who are company X’s competitors” Google search and will form an opinion of the competitive landscape before making a decision. For this reason, even if a potential customer doesn’t ask about your competitor, your sales team should be trained to ask “what other solutions are you considering?” because you want to have the opportunity to comment on them (more on this later).
Many companies approach direct competitor inquiries with dismissive responses like “they aren’t really a competitor” or “we don’t really see them in the market.” A particularly sneaky technique is to respond by redirecting to a non-threatening competitor with something like “Oh, we don’t compete with them, we see our competition as being {insert giant company like IBM that has 1000x your market value and who doesn’t know you exist}. The problem is that the dismissive approach is dishonest. Training your team to be dishonest is paving a slow road to hell where you will ultimately lose their respect and trust. After all, if sales management is training the team to be dishonest, why should the team assume that leadership is being honest with them?
In addition to being toxic to your company’s culture, the dismissive approach misses an enormous opportunity for you to tell the story of your competitor. A buyer is going to form a narrative in their head about the competitive landscape before making a decision. If you don’t take the opportunity to create a narrative about your competitor, you’re leaving it to chance that the buyer will form the story that you want. Why leave things to chance? You should talk about your competitor, but what should you say?
Dear Competitor, please lay here and wait for the bus
You want to win. You want to win badly. You’re tired of fighting your inferior competitor every day. They suck so why are customers still even asking about them? Ugh!!! Given all the frustration of day-to-day competition, it is only natural that you would want to take a shortcut and answer an inquiry about your competitor with a litany of FUD (fear, uncertainty, and doubt) to dismiss them as a viable rival as quickly as possible. Some of the more popular FUD lines I’ve heard include: “I hear they are having trouble raising more money”, “Their churn is really high because the product doesn’t do what they say it does”, “They seem to be really struggling to find product/market fit”, and “Their product won’t scale”. Although some or all of these statements might be true (or have elements of truth), I don’t believe FUD is the right approach for a few reasons.
Mudslinging is an ugly game, and it will create a negative vibe within your team in the long run. After all, what type of employee wakes up every day excited to talk trash about somebody else? Unfortunately, those sales people do exist, and you don’t want them on your team because they will also eventually talk trash about co-workers, leadership, and customers.
By trying to throw your competitor under a bus, you are missing a significant opportunity to be helpful to a potential customer. In my experience, buyers are attracted to sellers who are thoughtful, honest, and can provide constructive input. These attributes also help build trust between a buyer and a seller. FUD is not thoughtful, helpful, or constructive. FUD can even come across as petty and untrustworthy. This is especially true if the customer has already formed a favorable opinion of your competitor. By leading with FUD, you run the significant risk of a buyer dismissing your comments altogether which will lead them to form their own narrative instead of the narrative you want. You’re missing the opportunity to build trust and respect between the buyer and the seller.
So what exactly is this alternative approach?
Instead of ignoring your competition or throwing them under the bus, create a healthy and constructive narrative about the competition that helps your potential customer better understand their choices while clearly differentiating your company. You can accomplish this with four simple steps.
Step 1 (approximately 50% of your response) – When asked about your competition, start by talking about your own company on a philosophical level. This answer should begin with who you see as your ideal customer and include what problems you are interested in solving for that customer. When I was at Gnip, we would make sure prospects understood that Gnip was focused on serving the largest enterprise software companies in the world who cared about reliability and scale above all else. We would then point to customers like Salesforce, Adobe, and IBM as validation that our approach was working. There were ultimately lots of Gnip customers who were not the largest enterprise software companies, but many of those smaller customers completely aligned with our philosophy and focus and aspired to someday be large software companies.
Step 2 (no more than 15% of your response) – Talk positively but briefly about what you view as your competitor’s philosophy and ideal customer. This part of the conversation is the tricky part, but you stand to gain real credibility and trust with your potential customer if you stay on the high road and provide a thoughtful overview. Even if you are fighting over the same customers, you need to understand and highlight the type of deals your competitor was winning over you, especially if they were different than what this potential customer was looking for. Again, looking back on my Gnip days, we knew that our main competitor was getting traction with early-stage startups. We would give them credit for that without a hint of negativity. It is worth noting that your competitor likely wouldn’t agree with your characterization of their philosophy, and that’s fine as long as you are providing what you view as accurate observations. The point here is that you’ve embedded a narrative for the buyer to consider.
Step 3 (20%-30% of your response) – Give recent examples of company decisions that reinforce your focus. These examples can include recent product launches, partnerships, or announced customer wins. Bonus points if you can give specific examples of how your ideal customer is already benefiting from these latest additions.
Step 4 (no more than 10% of your response) Give a straightforward example that highlights your competitor’s focus that ideally contradicts your focus. At Gnip, we would describe how our competitor offered pay-as-you-go pricing which was widely appreciated by pre-funded startups. We would also point out (without being negative) the contradiction that our enterprise customers didn’t value pay-as-you-go pricing and were actually requiring us to offer multiple-year agreements.
If your team gets this right, you will get significant credit for being helpful. Your previous statements about your product and capabilities will hold more weight with your customer because they’ll view you as trustworthy. This trust will be especially apparent if your competitor has taken the opposite approach and tried to throw your company under the bus. The contrast in styles can be really clarifying for a prospective customer. Most buyers are more attracted to helpful, honest salespeople than they are swayed by mudslingers.
This approach will also help a prospective customer and your team to quickly qualify an opportunity which will save everyone a bunch of time. Yes, you do run the risk of helping a prospect select your competitor if your competitor’s philosophy is more aligned with the prospect’s view of the world. However, I would strongly suggest you are better off losing these deals upfront versus winning a deal that will likely churn in the future when the customer realizes they made the wrong choice.
I believe that honesty is the best approach. You’ll win more deals and you’ll build a healthy culture where your team is proud of their approach and their work. I’ve witnessed more than one company switch to this approach, and this small mindset shift can be a game-changer. Your narrative about your own company and your competitor will be refined over time as you get more feedback from clients, and you might ultimately find that your refined narrative will start to provide more clarity for your future product roadmap.
If you decide to follow these four easy steps, I’d love to hear from you how it is working.
p.s. I wrote this post from the perspective of having a single competitor mostly to avoid writing competitor(s) each time. Many companies have multiple competitors and you’ll need to have a narrative for each major competitor in the beginning. As the market matures, you’ll want to shift your approach. I’ll cover the shift in a follow-up post.
___________________
Also published on Medium