If you are a Sales Professional you like to win, it’s in your DNA. You love winning and hate losing. But it’s not just about doing a professional job for the customer, though that’s important. Knowing you were better and smarter than the competition feels so good.
Winning a competitive pitch requires a strategy. Most sales people only apply one strategy and that is to put their best solution forward. That might be ok if their solution is superior to the competition. But what if it is not and the competition is putting a similar solution forward? Haven’t you just given the customer a good reason to ask for a better price?
Let me talk about 4 alternative strategies and how you can use them depending on whether your competitive position is strong or weak. The alternatives are:
Whatever the situation you need a strategy. Even if you are clearly the preferred supplier? Yes! Because your competitors will also have a strategy and they will be trying to catch you out. Let’s deal with that situation first.
A Direct Strategy for when you are in a strong situation
You know that good feeling when you win a competitive pitch, especially if you have stolen it from the front-runner? Well, if you are that front-runner just imagine how bad it feels to lose. You don’t want that to happen.
The first thing to do if your position is strong is move the sales process ahead as quickly as you can – don’t give the competition time to come up with a strategy to take the sale away. Develop a Mutually Agreed Action Plan (MAAP) with the customer. It puts you in charge of the process and the schedule so that the competition doesn’t have time to come up with a way to get ahead.
It’s also important to have Pit-Stops or to ask an internal person you trust to challenge your deal. Make sure you are not getting complacent about the progress of the pitch – think about what the competition might be up to. Try and put yourself in the shoes of your competitor. What would you do if you were them, trying to win from a weaker position? Think of it like a brainstorm where you come up with as many ideas as you can to win against yourself and make sure you can counter them.
Our client was caught out
A large IT consulting company we worked with told me how they had been beaten by a challenger who should not have won the business. My client was the preferred supplier and already had 60% of the business. Their position was strong and it made perfect sense to give them more business. But the night before the presentations were due, the head of the challenger company called the customer’s CEO and said “Do you realise if you give the business to them they will have 90% of your IT consulting budget?” The CEO panicked and insisted the business should go to the challenger. It was the challenger’s Change Strategy that won them the business.
What should they have done?
My client was complacent; they thought they had the business already in the bag. What they should have done is to think about all the things the competitor might do and counter it. In this case they had several customers with 90% or even a 100% of their IT consulting spend with them. They could easily have asked one of those clients to provide a reference to pre-empt the competitor’s trap.
Of course a Change Strategy is a good approach to use if you are the challenger. Find a weak spot in the competitor’s case and raise it just in time to make sure it is considered but not too late for them to counter it. Timing is everything!
More Competitive Strategies when you are not in a strong situation
Can you delay the decision? You may have the solution your customer needs in the pipeline if you had more time. If it is a solution that will save the customer money, you may be able to work out a Business Case that demonstrates that the long-term savings outweigh the benefits of a competitor’s short-term alternative.
If you are strong in some areas and not others maybe you should just go for a piece of the business - the Divide Strategy. Either you could collaborate with another supplier to deliver the solution jointly or just pitch for the part where you are strong. One of my clients did this recently when they were asked to pitch for business in Germany and the UK. They simply didn’t have the means to service the UK business so they just pitched for Germany where they had relative superiority – and won it.
Don’t waste your time
You should only consider these strategies if you have fully qualified the lead. There is no point in spending a lot of time going after business that you can’t win or cannot retain the profit in the deal.
Ask yourself these questions to define the best competitive strategy
Is your solution superior to the competition? If the answer is yes, go Direct, if the answer is no, go to the next question.
Can you change the buying criteria to better match your strengths? If the answer is yes, go Change, if the answer is no, go to the next question.
Can you divide the business to win a portion in an area where you are strong? If the answer is yes, go Divide, if the answer is no, go to the next question.
Can you delay the decision to improve your position over time? If the answer is yes, go Delay, if the answer is no, go to the last question.
Have you considered walking away from the business, as you might not have a winning strategy?
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