Selling Against an Incumbent Vendor
/A client asks "My company sells a product that competes with a well- known brand name product from Company X, a much larger organization. The statistics on the cost savings realized by using our product as opposed to Company X's are inarguable, our product performance is strong, and our post-sale customer service is excellent. Despite the facts, we have a frustratingly low close rate with prospects whose contract with Company X is expiring. What is going on?"
A lot of different things could be going on here such as upfront versus long-range cost savings or the prestige and track record of Company X versus a lesser-known organization. I am going to focus on one in particular: the hidden costs and difficulties of switching vendors.
Many sales representatives spend a great deal of time discussing features and benefits as well as the cost savings of their particular product or service with prospects - and they should. What they sometimes do not do, however, is put the facts and percentages aside at some point and ask the decision maker what the true feelings are within the organization about switching vendors - irrespective of anything else. Sometimes having the less expensive product gives salespeople a false sense of security.
During the interview process with the decision maker they should be asking such questions as:
- How long have you used Company X?
- How do the users generally feel about Company X?
- What product were you using prior to them?
- Was it a difficult transition?
- What would be involved in switching from their product to ours?
- Would there be any costs associated with changing?
- Who would oversee the change?
- Who in your organization will not be in favor of changing vendors?
- Do you know what their reasons are?
- Would anyone feel they are putting their job at risk by switching from Company X?
- Who will be in favor of switching?
- Why do they feel this way?
- What are the odds that you will stay with your current vendor?
Convincing sales representatives to insert these kinds of questions into their interview process with the prospective client can be one tough sell. Most salespeople are terrified to ask questions like these. The answers they get take them out of their comfort zone: discussing features, benefits, and cost savings.
Those salespeople who do ask these types of questions will tell you that they are crucial to helping establish themselves as a partner with the decision maker. If they don't get a prospect to speak candidly about their current provider, they may lose the sale and never know why.
When a salesperson proves that they are not afraid to ask awkward or straightforward questions, they typically earn the respect of a prospect. The prospect, if they are the true decision maker, typically shows their respect by answering the questions in a straightforward manner. The salesperson's ability to bring all the facts to the forefront increases, not decreases, their chances of success.
