The factor of competition must always be figured into sales strategy.
In the past some companies have chosen to ignore competition, but much of the time this ignorance has been at their own peril. Ancient Chinese military philosopher Sun Tzu famously said, “Keep your friends close and your enemies closer”—and it’s just as true in business is it is on the battlefield.
You must know as much as possible about your competition: their sales strategy, their tactics, at the very least their products and their pricing.
Reaction
The wrong way to learn about a competitor, however, is simply to wait until they make a move and then make a counter-move yourself. But unfortunately this is the way business operates much of the time: when a company happens across a competitor that threatens to take away a deal, they just react. They drop their price, they add in a service or do something to counter the move the competitor has made in an effort to salvage the deal. Often, however, such a move is too late and can come across as desperation to the prospect—not the greatest way to inspire confidence.
Such a reaction can go further; a company can begin formulating policies and making more permanent decisions in reaction to competition. You’ve likely seen plentiful examples of this—a company suddenly cuts prices across the boards because they’re losing sales to a competitor. Or they integrate a feature into their product because they lost several sales to a competitor that had that feature.
Operating in this way does not make for stable sales strategy, as they are constantly being altered and violated to accommodate this switch of tactics. It can throw a sales force into a rather steady state of confusion.
How can a company stop being reactive and start being proactive with their sales strategy?
Knowing Your Enemy is the Best Sales Strategy
Following Sun Tzu’s advice, a company should thoroughly check out the competitive landscape as early as possible in the life of a product or service. Ideally, this would occur even before the decision is made to launch the product—but if not it should happen as soon as can be done.
What is the competition offering that buyers want? What is the pricing like, and are buyers happy with it? How is their service? Obtaining answers to questions such as these will not only tell you how the competition is functioning—it will also very likely give you ideas of how you can improve your product or service.
Of course, a company could also take an even more basic step that many companies—including your competitors—almost never do: research the market and find out what potential buyers would want in that product or service, completely ignoring any other existing products. They then do everything they can to make their product or service conform exactly to market needs and wants, not even thinking about the competition.
After such research is completed, you may find that some competitors are providing a majority of what the market is saying it wants. But you will likely discover that competition is only partially fulfilling these market demands and buyer’s needs—and that your company, now knowing the whole truth, could gain a serious advantage over all the competitors.
Edge on the Competition
Having this research in hand, you then formulate or modify your sales process—the exact series of steps your salespeople take in moving a sale from lead to close. Right there you have another edge on the competition: your sales force has confidence in knowing what actions to take and when, has an idea of how potential buyers will react, and how to solidify relationships within the target company. The more solid a customer relationship, the harder it will be for a competitor to worm its way in.
As the sales process is established, it should be reflected in your company’s CRM solution. In this way, the sales process is completely supported by automation and your sales force can function at top speed.
The best sales strategy is forged with a full understanding of the competition—and most importantly with a full understanding of the potential clients.
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