How to beat your competitors, win the deal and become #1

MEDDICC - C as in Competition

In this article you will learn how to win over your competitors. You will get tools to analyze the competitive situation, find your unique advantages and four strategies to win. You will receive a battery of questions that you can use to explore what the financial buyer, your champion, and other key decision makers think about you, your solution, and competing options. In the chapter, I also cover how you can avoid the deal running into the sand, i.e. the customer chooses not to do anything. After reading this chapter you have access to the entire MEDDICC? method, you can now use all seven questions in your sales calls.

Why the customer wants to talk to more suppliers than you

When you buy a car, accommodation and travel, you probably look at many options, first a broad scan of the market to learn what is available and what it costs. Once you have become more specific, select a few options to review in detail to ultimately decide what is the best choice for you. Your customers do exactly the same. In the chapter on D, decision process, I describe how the buyers send out requests for quotations to learn the market, make a shortlist of the 2-3 alternatives they want to meet in order to finally negotiate the best price and sign a contract with the selected supplier. In order to narrow and prioritize among the suppliers, the buyers create decision criteria, D in MEDDICC? - decision is criticized. It is usually price, quality and delivery ability. But often the customer's champion has already decided on a favorite supplier. In order to build up a bargaining power, they need to take in more competing offers.

An example of this was when a large construction company had decided to centralize its purchases and save a lot of money by selecting a few suppliers to buy from. They had major problems with the local offices choosing local suppliers and neglecting to use the framework agreements negotiated by the buyers, which led to higher costs for the building materials and uneven quality. But it was only when a small specialized company contacted them and showed them a completely newly developed system for centralizing purchases. The potential profit was enormous, over SEK 2 billion per year. Both the purchasing manager and the CEO loved the solution, but the CIO, the IT manager, did not want more systems to manage. Therefore, the small company's solution was perfect, all the data was in the cloud, and the CIO did not have to take any responsibility. The small company's salesman could breathe a sigh of relief. The deal was pretty much sealed because they were the only ones on the market who had a solution to the customer's problem. But the purchasing manager was worried, what if there were better options on the market? He contacted the major system providers such as Oracle, SAP and Microsoft, did they have anything to offer? The construction company drew up a requirement specification and invited the suppliers to submit offers. Because the potential business was large, the suppliers invested a lot of resources in adapting their solution to the customer's needs, creating impressive demonstrations and providing attractive quotes. Six months later, the customer announced their choice: it was the small company that got the deal, the other systems required extensive efforts from the IT department, something the CIO had early on refused. Why did the purchasing manager choose to spend a lot of time collecting quotes from suppliers they didn't want to buy from anyway? The answer is simple: he needed to scare the small company into lowering its price. A tactic that succeeded. The example shows how purchasing managers take in competing bids to build up their knowledge and negotiating power. You can fall victim to the purchasing department's scare tactics and lower your price unnecessarily. You can also be the supplier that is the benchmark, your information is used to pressure another supplier. In this case, the small company had a big advantage: they had influenced the customer's decision criteria, D in MEDDICC? at an early stage. They also had a Champion in the CIO and in the Purchasing Manager. An interesting detail is that I trained one of the competing suppliers in Solution Selling? while the procurement was in progress. The sales team was completely convinced that the customer would choose their solution. The supplier put enormous resources into winning the deal. When the customer finally announced his decision, to choose a different technology to solve his problem, everyone on the sales team was surprised. They had received the impression from the purchasing department that the technology was not a critical issue. The sellers had missed that the customer had already had a dialogue with another supplier for several years. They should have asked more questions.

Expect that there will always be competitors, in the customer's organization – they may be able to create a solution themselves – or in the form of your hungry industry colleagues. But there may also be competition completely outside your own industry. It can be consulting companies or system suppliers that can make part of your solution. It disturbs sta competitor, something I will describe later in this chapter, is "non-decision". The customer chooses not to solve their problem. In high-tech sales, this is the most common reason why deals don't close, at least 50% of sales processes end in "no decision".

To win the deal, you need to know what other options the customer has to solve their problems, their pain. It is important to see the big picture: when customers discover that they have a pain to solve or that they find an exciting solution, the most natural thing is to first gather information using the Internet and then contact sellers to get quotes. This buying journey means that most sellers spend most of their time responding to inquiries in competition with other similar vendors. Fewer and fewer sellers invest in being the one who brings up the customer's pain and sets D, decision criteria, before any other supplier enters the picture. It could be doing nothing at all, choosing a different vendor and solution, or making some completely different strategic move that eliminates the need for your solution. The customer may choose to buy up another company or sell off the part of the business that has the problem. I have lost several deals because my potential client went out of business, they lost too much money. The competition is any person, supplier or initiative that competes for the same funds or resources as you do.

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The client chose a competitor whose brand we had never heard of

Technological development is incredibly fast today. You and your company may have created a strong position in the market, even be the market leader. But suddenly you start losing business to new and unknown suppliers. Winning in competition means constantly analyzing the competitive situation and acting lightning fast when a new competitor, technology or change in the way customers see your solution can be the best way to solve their problems. Taking new competitors seriously is a common mistake, when sales dip, most sales managers believe that salespeople are not working hard enough. With each passing day, sellers lose the opportunity to control their sales situation by seeing and analyzing how the competitive situation has changed.

An example that made this clear to me was when I was coaching a sales team that had lost 50% of their business to new, cheaper, competitors. My client had for a few years had a huge growth, they were among the first to sell innovative 3D printers. The printers revolutionized the manufacturing industry's way of producing small components. The vendors sold their solutions to the customers' research department, which started pilot projects. The solutions were very technically complicated and required a lot of expertise from the buyers. The salespeople had quickly learned to find their champion in the development department, and built their sales pitch on technical advantages. After a few years, when I came in as an expert in high-tech sales, new competitors had started to appear. They sold products that only had 30% of the capacity but offered a price that was 10% of my customer's. In a few months, the competitive landscape changed. The most skilled salespeople were still able to win business with their ability to show customers how to save money and increase quality, but more and more customers chose to ignore their advanced solution. Customers could now afford to buy a cheap 3D printer to try for themselves what it could do. The salespeople had lost valuable time, they had neglected to analyze the new competitors. Now the situation was serious. Would the sellers fight even harder or would they choose a different path? I advised them to drop the fight against the cheaper competitors and instead focus their sales on the customers' management team. They ignored the technical details, they wanted to lower their costs and increase their sales, by launching new products faster. The sellers changed their sales message and began to process global manufacturing companies, with factories in several countries. My client had, in addition to the market's most capable 3D printer, a global service organization. The sellers changed their pricing model. They offered a fixed monthly service contract that included technical design support and global service. They were no longer selling a 3D printer, they were selling a service that solved the customer's problem. This was the starting point for a new sales success where they once again became the market leader. The example shows that you may need to be prepared to change both the way you argue for your solution and to whom you sell.

Do a proper competitor analysis in every deal

The most common reason why sellers lose business to competitors is that they did not analyze the competition and that they overestimated their advantages. Through a systematic MEDDICC? process, you won't miss finding out what you need to do to win over your competitors. If the resistance is too great, your advantages and relationships are not e.g insufficient, you need to withdraw from the deal. Your winning odds are too low. You risk losing time and resources to no avail.

Once you have mapped the competition, you can do a competitive analysis to see where you have strengths and where there are weaknesses. Your champion will be your best source of this information. When you have mapped the competition, you need to create a competitive strategy, which you anchor with your Champion. It can be about price and business terms, what you offer, implementation schedule, partnership with the customer or other suppliers, legal terms and other things that make your offer less risk-free and more financially beneficial. Be prepared that the competitive situation can change from one day to another. In the end, it is the economic buyer who makes the decision, not your Champion.

Competition is one of the most neglected and underestimated risk factors when it comes to securing and closing a deal. Even if your prospect assures you that he or she is not looking at other solutions, it may still be the case that the people in the organization who will approve the solution will ask for comparisons or that the purchasing department will request additional quotes to compare the prices. Competitors go beyond offering the same solution as you. They may also refer to the customer's "Do It Yourself (DIY)" solution or current way of doing things: the "If it ain't broke why fix it" mentality where the customer decides to do nothing and continue with the status quo The competitor can thus protect his current contract and gain time.

Find more champions in each deal

Knowing your competitors inside and out will help you strengthen your case for neutralizing your enemies early in your sales process. By identifying and building multiple Champions, you can grow deeper roots within your prospect's organization and gain more access to information. By doing so, you can also better understand your organization's needs, so you can set traps for your competitors and convince your potential customers that your solution is the only solution they need. You really don't want to find out about the competitive situation until after you've lost the deal. Once your paper process is in full swing, you should be the customer's first choice.

How to prepare to beat the competition or know when to get out

"Live to win another day" is a Celtic proverb. The Celts often went to war and were skilled warriors. But they had learned a dear lesson, fighting an overpowered enemy could cost them both victory and heavy losses. To retreat, to retreat, became one of their strategies, to wait until they were strong enough to strike their enemy. We can all learn from the Celts when it comes to business. One of the basic ideas in MEDDICC? is to use time in the best way. Before you spend your time winning business when you know other suppliers are fighting, you need to be self-critical and ask yourself:

? Who should I win over?

? Can I win?

? Is it worth winning?

? What will it cost us to win?

? Can we win more business with this strategy?

An example of this was a fast-growing company that built and leased data centers. The customers were international IT companies. For customers, it was not so important where the data center was located, but there were other factors that guided their choice, access to capacity and the cost of electricity. The sales team received inquiries from all over the world, often from unknown customers. The customers sent a technical requirement specification and wanted a quotation with the best price. Usually all contact took place via digital meetings and email. The sellers' hit rate was low, around 15%. They began to question themselves, Did it really make sense to spend hours of work providing quotes to clients they knew very little about? They began by reviewing the trades they had won and lost over the past year. The pattern was clear and frightening, the vast majority of the deals had just run into the sand, the customer had only wanted to do a scan of the market. The sellers discovered that there were 3 things that all winning deals had in common, a clear schedule, a budget and a strong Champion. They also noticed that customers were impressed when they visited the company's data center, either through a site visit or through a digital tour. It created increased confidence in the solution. The sellers became more critical, began to make demands on the customer before spending too much time on the deal. Many requests were selected because there were no conditions to win. The salespeople used the free time to expand their network with new and existing customers. There was new business to be won. The salespeople implemented MEDDICC? and received training so that they became more adept at asking questions about the customer's options, negotiating opportunities to meet with more decision makers at the customer, understanding the needs behind the the technical requirements and to sell their competitive advantages early. They could double their hit rate without working any harder.

Who are your most dangerous competitors?

I've mentioned several times the importance of looking at the big picture, that it's not just your industry peers who pose the biggest threat to your business. Here's a list of competitors you can keep an eye on.

? Companies that offer the same solutions as you - Your natural competitors

? Other projects/initiatives that require the customer's funds or resources

? The organization's internal team builds its own solution

? Inertia – The organization chooses to do nothing

? Strategic changes that eliminate the need for your solution, such as acquisitions and sales, partnerships and outsourcing

You need to ask the customer what alternative solutions they see, ask them to think outside the box. If the customer already has a supplier, you should challenge by asking questions like "If you already have a good supplier, why spend time talking to us?" Ask them to sell you why you should get involved in the business. Here is a list of more questions you can ask to better understand the competitive situation.

? Political Who internally within the customer is connected to or favorable to the competitors?

? Technical: How does our solution match the technical elements of the decision criteria? Do we have advantages over the competition? Do we have disadvantages? Can we influence the decision criteria?

? Commercial: Do we have a winning bid? How do our pricing and terms of business compare to our competitors? Are there cheaper alternatives? How does the economic decision maker value the return on investment?

The vendor with the strongest Champion wins, not the best seller.

Your job to win the deal. Your champion's job is to use your solution to improve their company's operations. Whatever promises you made in your sales pitch, it is your champion who must live up to them. You must help your champion create a position where he can gain the trust of his management team. The strongest, the most politically entrenched and the most credible champion will win. They are passionate about realizing their ideas and you are their path to success. Your success is their success. I have even witnessed occasions when sales managers, my champion, who failed to get through our sales training program resigned. He lacked the opportunities to implement the changes he wanted. Ask yourself how strong your champion is and what champions our competitors have and how strong they are. Also, ask yourself who the financial decision maker is listening to.

Four winning strategies

Depending on how your competitive situation looks like, which you find out in your competitive analysis, you can choose to use one or more competitive strategies. These strategies are based on Sun Zu's famous book The Art of War (12). In that book, the author describes a large number of strategies for winning a war. I have selected the most useful ones, suitable for High-Tech sales. Together with several skilled sales teams, we have clarified Sun Zu's ideas in ways that make them easy to understand and easy to use in sales situations.

Head to head.

When you have a strong competitive advantage, a strong Champion and connection with the financial decision maker, you can beat your competitor with power: Offer a better solution, a more valuable contract, better guarantees and faster deliveries.

An example of this was when a customer would choose a CRM system. They had systems from several different suppliers that could all solve the customer's problem. The company's top sales director is also responsible for the largest sales force. They had a system that worked very well, they had no desire to replace their system and have to invest time and money in something new, even if it was better. The sales director asked the management to be responsible for the procurement process and promised to present three good alternatives. It was a big job that none of the other managers had time for. The sales director asked his supplier to create a requirements specification that was neutral but made sure there were some important requirements that only they could meet. After quite a long process, with many demonstrations and meetings, the sales director was finally able to present three quotes to the management team. You can probably guess which option the customer chose. The sales director was the supplier's Champion. They influenced the procurement's decision criteria, D in MEDDICC?, before the other suppliers were invited. Their position was weak from the start and they should have guessed owls in the bog. They could have demanded to meet with the management team, interview the salespeople who would be using the system, and then try to create a stronger competitive advantage. But they were too weak to win against the established supplier who also had a very strong Champion. The smartest thing would have been to withdraw as soon as they could.

Deal Reshaping

The easiest way to explain this strategy is to take the example of the customer who wanted buy oranges. He asked the various sellers for the best price. But one of the sellers curiously asked what the customer wanted the oranges for: "I'm going to squeeze juice". Aha, thought the clever salesman, maybe I can win the deal if I sell pre-squeezed juice instead of oranges. Then I can also sell the shells to a marmalade manufacturer. By asking the customer what they want the solution to do, just like the juice salesman, you should focus your questions on understanding what goals and pains are to be reached. Then you can come up with a solution that is different from your competitors. It could be renting out the solution instead of selling it, setting common goals and linking a guarantee to these, entering into a partnership with the customer or creating a consortium with other suppliers. There are many ways to think outside the box.

An example of this was when a Swedish provider of telecom services received a contract from a large property owner. The customer wanted a solution and a price for building in wireless wifi routers and connecting these to the Internet. It was an advanced solution, completely innovative. The customer had invited international suppliers. They saw their chance to gain market share in a new market. They made very profitable deals in their home markets, it didn't matter if this deal wasn't profitable. The competitive situation for the Swedish supplier looked bleak. The only valuable competitive advantage they could see was language. All the other vendors had English speaking sales teams and English speaking support. The Swedish sales team started asking the buyer and the technical decision maker questions about how they wanted the support to work, who would need help and with where and under what circumstances. This turned out to be very for the real estate company, something they missed. They had been completely occupied with the technical design. Soon, the property company's marketing manager joined the discussion. She believed that the support was the most important thing, the technology could certainly be solved. But the tenants would always be put first. She became the Swedish supplier's champion. Together they worked out a draft of a support agreement. It clearly stated that the supplier would offer support services in Swedish and between 0800 and 22:00, weekdays and weekends. These requirements were difficult for the international suppliers to meet, they would have to build up their own customer services or hire an external company to take over the responsibility. The Swedish supplier won the contract by doing a Deal Reshaping, they shifted focus to an area where they were much stronger than the other suppliers.

Divide and Conquer

In short, the implication of this strategy is that you are not bidding on the whole deal, you are not in a strong enough position to beat out the competition. You aim to take the part of the business where you are strongest and have the best conditions to win. Then expand your business with the customer.

An example of this was when a salesperson would open an office and sell consultants in a new city. There were established competitors who had developed deep relationships with key customers. The seller tried to book meetings with customers but it was very difficult to reach them. He got so many rejections that he almost gave up. Finally, one of his managers came up with a clever idea, is there any other supplier who lacks the expertise that we have?” The salesman caught the idea and called around. He got a job at a supplier of paper machines. They often received requests that they found difficult to answer because they lacked the skills to make special adjustments and investigations. The salespeople invited potential customers to a mini trade show, where the consulting salesperson could build relationships with the other salesperson's customers. In this way, the sales consultant could get his first assignments, to carry out investigations for upcoming procurements. After a couple of years this had become their specialty – chosen for their specialist skills and using entry level assignments to broaden their business. A good example of how the Divide and conquer strategy can be used when processing new customers.

Deal repositioning

This strategy is about setting a price picture so that the customer experiences your offer as the most affordable. By adjusting your price level on the products and services that are easy to compare with those of your competitors - so that you are perceived as affordable. And the services and products where you have a competitive advantage you must charge a lot for. Then you can get the buyers on your side, they like low prices. This strategy is especially effective if you sell products and services that are standardized and offered by many. What do your quotes look like? Do you print the price of each product or service? Maybe even the product name and article number? Surely you have noticed that customers chose you because you were too expensive. Perhaps you have included the cost of the competence and service you provide in the price of the product tern? Then you should use this strategy to increase your chances of winning the deals. Set a market price for the products and specify the services separately, service by service. Charge a lot for them. Then you clearly show why the customer should choose you, while making it easy for the buyers to choose you.

One example of how to apply this strategy was when a company in the machinery industry had found itself in a tough situation, Chinese competitors had started to take business right in front of their noses. Their price was considerably much lower. Although their quality was worse, it wasn't bad. The customers found the Chinese supplier to be an affordable alternative. The salespeople at the old company were wondering how they were going to win contracts now that they were suddenly perceived as expensive. They had already pushed their prices as far as possible. The solution was to change the way they wrote their quotes. They neglected to try to have a certain margin on each product. Instead, they started from the margin they wanted on the whole deal. They set the price low on the components the Chinese supplier could supply and added new parts to the quote: design, training, manuals and maintenance. They set a high price on these knowledge and expert skills. The total margin on the deal was the same as before, but they had made their offer clearer. They began to win business again, step by step they gained a reputation for being incredibly competent. They also began to take over the management of machines the Chinese supplier sold. The sellers used the Repositioning strategy in a fantastic way.

Losing to No Decision Inc

Even if your competitor doesn't win, it's just as bad for you if the deal goes down the drain. If you sell high-tech solutions, it is almost as common that the business is lost to "non-decisions" as to competitors. Analyzing only the business you lost to competitors can give you a false picture of your strengths and weaknesses. There is probably a lot to be learned from analyzing the trades lost to "No decision".

An example of this was when I entered into a contract with a company that sold complex business systems to large companies. They rarely lost business to competitors. But many of the deals fell through, the pipeline was full of old quotes. When the sales people called to follow up, they received evasive answers such as: "We will wait until after Easter, the management meeting was postponed and we need to investigate the matter further internally first. We began to analyze the reasons why the deals ended up in limbo. The problem was that the finance department really liked the solution but they had no budget to cover the investment. The budget was decided by top management and they did not know how the new system would increase profits. The salespeople helped their Champion build a return on investment calculation, ROI, which showed how the company could reach its profit forecast. Champion managed to explain, without using too many technical terms, that this was the solution to the company's financial challenge. The sellers were able to turn a lot of the deals that had fallen into contract. They changed the way they sell: when they found a strong Champion, the salespeople helped him build a story that made management invest in creating budget space.

Here are some signs that your deal is about to go down the drain

? The customer is seemingly unwilling or unenthusiastic about connecting the impact of your solution to their business goals

? You cannot get in touch with the financial buyer

? The decision criteria are undefined and/or there is no decision process

? You have not been able to identify a pain strong enough to affect the organization

? You meet only one person at the customer and/or fail to find other stakeholders interested in sponsoring your business

? There is nothing that forces the customer to make a decision

? Meetings are rescheduled or cancelled?

Summary - fight to win or get out as quick as you can

If you hear or get the feeling that your competitors have beaten you, don't panic. Don't stoop to their level by talking bad about them. Instead, praise them and listen carefully to why the customer chose to talk to them, their benefits and positive qualities. You have a lot to learn, how to set up your strategy next time and what you missed in this particular business. In this chapter you have learned how to analyze the competitive situation, what types of competitors you should be on the lookout for and what questions you can ask. You have been given four strategies to win the business where your competitors have an advantage. I hope you also now realize that your champion is your most important resource in winning the deal.

Jens Edgren, Master MEDDICC Instructor, CEO

[email protected] www.meddicc.se