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In a selling environment, it is vitally important to think like your buyer rather than being focused on you, your company and your products. Their challenges, their solution decision criteria and the priorities of their decision criteria are all vitally important to know. In addition to thinking like the buyer, it is important to know the competition and thinking like the competition. The book, Premeditated Selling: Tools for Developing the Right Strategy for Every Opportunity, recommends and shows how to complete a competitive analysis as part of dealing with the competitive landscape.
Completing a SWOT (strength, weakness, opportunity, threat) analysis is part of gaining knowledge about your position when compared to competitive solutions. Looking at your strengths and weaknesses when compared to direct competitors is the first step (covered in a previous blog). Now we will look at the opportunities and threats portion of the SWOT.
Opportunities
Let’s start with the opportunities. We have an opportunity when there is a selection criterion in which the customer believes that we are strong. Unfortunately, this may or not be deemed as an important selection criterion. If a seller can make the customer care more, then there is a golden opportunity to create a competitive strength. In many cases, people put certain criteria as low priorities because they haven’t given them a great deal of thought. This means that if we can increase the customer’s awareness of the importance of these criteria – that is, rethink their overall impact on the success of the initiative – then we might be able to persuade them to elevate its importance.
In the cruise industry, an opportunity may lay in leveraging the age and quality of the fleet of ships. While you may be much stronger than your competitors in this area, the customer may not regard the selection criterion as important. The challenge in this situation is to figure out if this was their perspective because they simply had not thought much about it, or because they had deliberately rated this selection criteria as low in significance.
In this instance, questioning can help to gather needed facts. Examples of questions to uncover needed information could be:
• What problems might result from …?
• How might it help you to choose a provider who…?
• Are there any possible risks if…?
• Are there any potential benefits to…?
When it comes to your opportunities, ask yourself how you can raise interest and attention to the areas you excel in.
Threats
Threats are merely the opposite side of opportunities. The customer doesn’t care about the criterion, which is a good thing, because we are not perceived by the customer to be strong. Unfortunately, if our competitor implements a well thought out competitive strategy, one in which he makes the customer care about the criterion, then this present threat evolves into a weakness. One common mistake we see salespeople make when confronted with the threat is to ignore it, ostrich style. Maybe if we do not bring it up, we seem to think, it will go away of its own accord. This approach has its temptations. After all, if it’s not important to the customer, why bring it up? Let sleeping dogs lie. Unfortunately, if you don’t bring it up, who will? Well obviously, the competition will. But, what are appropriate ways for you to bring it up?
In the first place, you need to figure out a way to keep the criterion minimized. Sometimes this could involve dialog which allows the customer to articulate why the criterion is relatively unimportant. You might also direct the customer’s attention toward another selection criterion. Beware of being lulled into a false sense of security around the attribute that the customer doesn’t care about, because your competitor isn’t likely to sit back and ignore this issue.
Putting it together
Competitive analysis involves clear-eyed judgment, ruthless introspection, and unflinching candor. It involves what some philosophers call Methodic Doubt – test all assumptions, question hypothesis, seek answers. When you have your competitive picture, play to your strengths, and offset your weakness.
In summary
The point of the competitive analysis is understanding how your customers will evaluate you against them. Customers use prioritized selection criteria (that is, what factors are important to them), and compare each vendor’s strengths and weaknesses relative to that list of criteria. A clear understanding of the customer’s selection criteria will reveal where you are strong and where you are weak. The purpose of any SWOT analysis is to enable you to minimize your weaknesses, emphasize your strengths, exploit your opportunities, and neutralize threats. The reason this is significant in competitive analysis is because your strengths are likely to be your competitors’ weaknesses, your opportunities their threats. Knowing where your competitors stand in relationship to your own strengths, weaknesses, opportunities, and threats will enable you to manage them more effectively.
Written by Kevin Jones, Principal – Ignite Selling
Our Ignite Your Sales Strategy simulation will allow your team to develop high impact strategies that will accelerate their accounts through their pipeline. We will help you win the most important opportunities by helping your sales reps understand competitive landscapes, better manage the key influencers, and accelerate the decision making process.