BECOME AN EXPERT AT COMPETITIVE POSITIONING
Situation 1: Selling against Goliath
C h a p t e r
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. . . AND DAVID
the giant, Goliath, was beaten in a fight by the small boy, David. I often see “Goliaths” beaten, but it takes flawless execution of a well-designed plan.
The most important thing of all when selling against a much bigger competitor is to be certain that, if you meet or exceed all the prospect’s requirements, size—for size’s sake—does not matter. That’s an issue of qualification. You may have the best product, innovative service capabil- ities, committed people, stellar customer satisfaction levels, top product quality, most respected investors, or anything else that you consider of value, but if size matters, little else will measure up. And if size does mat- ter, and you can’t convince your prospect fairly quickly that it shouldn’t, you need to get out of there—and on to another opportunity. Know your prospect’s history regarding doing business with smaller compa- nies. It may mean nothing to them, because they do it all the time. On the other hand, you may be the first and have a long, bumpy road ahead.
There are certain opportunities for which you should not compete, because you can’t win them. Sorry, but that’s a fact.
Now what do you do? You’ll need to influence your prospect’s decision criteria, so that the perceived value of your competitor’s size as well as other size-related capabilities are diluted, neutralized, or in the best case, seen as a disadvantage. Many salespeople are accustomed to highlighting a competitor’s weaknesses. In the situations where you are competing against a bigger company, you will (professionally and subtly) dilute their strength.
Here is a simple, well-proven example. Let’s say I sell for a smaller professional services firm and I am up against a major player. Based upon preferences and needs of the buyers, I may decide to use the small- fish-in-a-big-pond approach.
It goes like this.
Mr. Prospect, there are few people who would not be impressed by my competitor’s size, global reach, and financial as well as human resources. I’m sure they proudly reference some very prominent customers. However, you might consider that a proj- ect such as yours, although highly critical for you, might very well not have the same level of importance for them and there- fore may not generate the ongoing attention within executive
levels of their company that their premier customers’ projects would. It’s only natural . . .
From that point, you would discuss how you would meet their tech- nical requirements and establish a business relationship going forward, stressing the attention that your executives would pay to the progress.
You’d convince them that your company’s success would depend directly on their success, not the other way around. You’ll be portraying them as big fish in a small pond, with the driving message being how important their business is to you.
If you are effective with this approach, you will have moved factors such as size and impressiveness of customer list down in importance, while moving up in importance executive attention as well as your com- pany’s interest in their success.
Here are challenges you might face in a David and Goliath situation and some alternatives to consider.
• Challenge. The competition questions your viability to the pros- pect. “What would happen to you if they were to go out of busi- ness or be acquired?”
• Response. Don’t wait for this to happen, as it most likely will. Im- munize. Exploiting their opponent’s size is the first card most sales reps who sell for large companies—the Goliaths—play against the smaller guys. You need a solid story, prepared in advance, concise and compelling, which must be credibly and sincerely delivered first by you, then echoed by your most senior executives. Mitigat- ing perceived risk is critical on the path to success when compet- ing against a much larger rival. Don’t wait.
• Challenge. The competition attempts to expand the scope of the evaluation into areas where you don’t have a solution.
• Response. Again, this practice is pretty standard for the big guys.
Alert your prospect in advance that this may happen. Praise their efforts in defining their requirements as well as they have. Ask if they are prepared to have the scope of their initiative, project, or investment substantially expanded. If they say no, alert them that other vendors may employ this sales strategy to differentiate them- selves as well as to increase the size of their contracts.
. . . and David Slew Goliath 169
Please understand that I never advocate negative selling, mud sling- ing, or slamming the competition. On the other hand, when you have built relationships in your accounts with influential people who are willing to help you, you’ll need to provide them with the messages—the sound bites and talking points—to position your company advantageously.
• Challenge. The competition attempts to impress your prospect with hordes of resources to demonstrate their prowess and convey a safety-in-numbers message.
• Response. Again, prepare your prospect in advance that this may happen. Qualify them on this issue, again. Suggest that these big- ger companies have extra resources on board just to impress pros- pects to make a sale. If you know your competitor’s bid will come in considerably higher than yours, you may want to subtly suggest that using resources to win business may be a reason that their overhead is so high. Also remind the prospect that if they do go with your competitor, the meter will start running.
This approach is mandatory when you compete against companies who lavish prospects with toys, gifts, free trips, and other goodies to try to influence their decision.
• Challenge.The competition, because they are bigger, is willing to guarantee results in a way that you cannot.
• Response.They may be able to guarantee that their product will get installed (or service delivered) by a certain time, but what if they don’t deliver? The customer may not have to pay the vendor any more cash, but what about lost business opportunities, reduced customer satisfaction levels, and employee morale if things go wrong? Will the guarantee cover that?
Tough qualification combined with strategic competitive selling does work. After confirming that size did not matter in a face-to-face meeting with a division president of a $5 billion corporation, my client, the CEO of a small enterprise software company, commanded that his team pur- sue a $2 million contract competing against a $750 million rival. Now there is a David and Goliath scenario.
I coached that sales team during the nine-month sales cycle. Among other things, we diluted the competition’s apparent strengths and por- trayed their large size as a liability, which in this case it really was.
My client’s team outsold the competition, won the business, and earned a lot more business after that, because they delivered what they promised to their customer. As the CEO, elated with a contract five times larger than anything his team had secured up to that time, related to me, “the most important thing for me is that this process is repeatable.”