Ask any sales executive or sales manager, what is their biggest challenge when it comes increasing their sales, their response is increased competition. Our internal studies showed, 65% sales manager respond that competition is their biggest challenge when it comes improving sales performance.
No doubt, most companies are operating in a highly competitive environment. Take the case of the automobile market, whether it is for cars or 2 wheelers, there are 4-5 very strong players in each segment.
Every company looks for that niche market and enjoys for a while the market dominance, but soon competitors will flood the market with similar products.
This is great for the buyer as buyer gets more options to compare and also it helps to get a better price and overall market improves. But the question is how do sales executives handle this competition?
Accepting competition is good
Let me offer a radically different view than what most people say. For most cases, being in a highly competitive market is better than being in a market where no competition exists.
If a company has a product or service which is new to the market and no competitor exists, then imagine how difficult it will be to convince the buyer to buy your new product?
In general, 90% of buyers don’t want to risk buying products or services which are new to the market and cannot find multiple options.
It is not that the new products or services cannot be sold, but it requires extensive selling work backed by significant marketing support to educate customers or provide deep discounts.
Now on the other extreme, if there are 10-15 competitors for the same product, for example, mobile phones or CRM software, then it means there is a lot of demand for the product but selling for the same is tough.
These kinds of products are best marketed with attractive offers, free trials for buyers to switch from other products or acquire new customers.
The sweet spot for salespeople is when you have 2-5 competitors. In this case, the salesperson has the best chances to help buyers buy your product or service.
Salesperson instead of being worried about competition should focus on how to be competitive!
Outsell competition by being competitive
The first thing for any salesperson to understand is there is no control over competitors. Competitors enter the market and leave on their own. Hence the focus for a good salesperson must be on selling the product or service and helping the buyer see value in what his product/service offers better than competitors.
Powerful buyers will always force the price down or demand more value for themselves. Most salespeople who don’t know how to handle competition, start the sales discussion over price. If the competition is intense, the salespeople opt the easiest way of lowering the price.
Now by lowering the price of a product and acquiring the customer or selling a price which doesn’t generate profit over long-term means, it is a loss-making proposition. There is no pride in this.
Instead, the salesperson must explore ways to demonstrate the value of the product. This ensures that the product is not just competitive but also provide higher value
For this creating a distinct value proposition is key. This helps in building a long-term relationship that generates profits. And also both customers and selling company will win together.
The clear job of salespeople is not to worry about competition but instead spend more time and effort to understand the buyer make him see how his product or service is highly competitive but also offers better value than others.
As long as the salesperson does this, sales keep coming. Let us know what you think and do share your comments.