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Written by Kevin Jones, Principal – Ignite Selling
Many sales leaders train their sales force on how to sell. Listening, understanding the company’s value proposition, and face to face selling skills are very common programs for a sales force to implement to improve skills in selling. We recommend a thorough competitive analysis in the curriculum. In a previous blog we discussed understanding how buyers buy. Discovering and ranking the buyer’s selection criteria is the first step in a competitive analysis process.
The next step in the competitive analysis process is to understand competitive advantages and disadvantages. Like doing a competitive SWOT analysis, this requires gaining insight into how the customer evaluates the options available.
Years ago, my wife and I were considering relocation from our home in the Washington D.C. area. As we evaluated geographic options, one of our major selection criteria was weather. My wife does not like heat and humidity, which ruled out portions of the Southeast and Southwest. And I didn’t like places that experienced snowfalls any later than February, which eliminated much of the Northeast and parts of the central plains. So, out of our short-list of cities, we selected Portland, Oregon, which is very well known for having abundant cloud coverage and lots of rain. In explaining to people how we made our decision, and that Portland had a relative position of strength with regard to weather, people were surprised. Portland wins with weather? It’s all in how you define it.
Analysis of strengths reminds us of the proverb “beauty is in the eye of the beholder.” One person’s trash is another person’s treasure. A salesperson might firmly believe they are strong with regard to a specific criterion, but their opinion matters little. It is what the customer believes that is important. We have to look at the selection criteria through the customer’s eyes. Learning this will reveal what we must do to improve our competitive position.
Getting your customer to describe honestly how you stack up to their selection criteria can be challenging for a couple reasons. First, some customers may be reluctant to express true candor because they do not want to risk offending you. A second reason might be that they do not want to give you any negotiating leverage. A third reason can be they do not want to tilt the competitive playing field by revealing too much about who’s in front and who’s not.
One strategy we have seen top sellers use to gain insights into the mind of the customer is to rely on key advocates. They are already ostensibly in your corner, and if you’ve done your job right in cultivating them – and in helping them improve their influence – they can provide invaluable information
If you’re unable to learn first-hand how the customer sees things, then you will have to rely upon careful guesswork. What’s been the history for the customer in question? How does the market see you and your competitors? What have other customers said about you? While this method is certainly more analytical than fortune telling, it may prove in the end to be no more reliable. How unbiased can you be? Who else on your team can give perspective on the situation?
Competitive Assessment
The two parts of our competitive assessment are:
1. Selection criteria and their level of importance
2. Perception of strength and weaknesses when compared to the competition
You want to arrange this information visually to develop a clear, visual picture of how your offering compares to your competitors. Include all competitors and all types of competition confronting you and focus on selection criteria and your relative position of strength for each of those criteria.
Our ultimate goal in understanding the SWOT (Strengths, Weakness, Opportunity, Threats) of the competitive situation is to develop a sales approach that accomplishes the following:
1. Minimize weaknesses
2. Emphasize strengths
3. Exploit opportunities
4. Neutralize threats
Now what?
Accurately completing this analysis can be a bit challenging and time consuming, simply because you have to get inside your customer’s head to assess the situation accurately. However, the competitive analysis is only the beginning. It is what you do with this information that matters.
A tool for completing a competitive analysis can be seen in our new book, Premeditated Selling: Developing the Right Strategy for Every Opportunity. Order here.