How to Find Out What Your Competitors Are Doing That You Are NotDan Perry
February 21, 2014 — 2,034 views
Every Sales VP wants to know what their competitors are doing. You want to keep a competitive advantage. Knowing how your competitors are enabling their sales force can provide an advantage. But most Sales VPs like you don’t know how to do it. They confuse competitive profiling and benchmarking.
We get asked to ‘benchmark’ the competition frequently. Although ‘benchmarking’ includes competitors, it is not competitive profiling. Benchmarking allows a comparison of you against your peers. This peer group is typically made up of 30-40 companies. Alternatively, competitive profiling enables you to deeply understand one competitor. This is extremely beneficial when targeting a single company. And there are specific ways to accomplish and use the data to be effective.
Download our Competitive Profiling Assessment. It will help you understand if you need benchmarking or a competitive profile. It will also guide you in proper questioning to learn valuable information.
We recently advised a client how to perform a competitive profile. Why? There was a 67% increase in loss business to one competitor. The past 6 months have been brutal. The win/loss interviews were too general to really uncover the root issue. Lost customers indicated they ‘matched the solution to the problem’ better. Or they felt a ‘better level of trust’. Another mentioned ‘superior installation references’. Not one thing stood out. It was time for a competitive profile.
We brainstormed with them on limiting our investigation to 3 actions first. We chose these:
- Sales Process: We wanted to get our hands on their sales process. Did they recently deploy one and was it more customer-centric than ours?
- Compensation Plan: Did they change their compensation plan incenting more new business vs. account development? Is this new compensation plan attracting more talented sales reps?
- Territory Design: Have they realigned territories putting their best people where the most market demand is?
We then developed questions to ask the competitor. And started asking:
- Current sales reps who used to work for the competitor
- Channel partners who represent both products
- Linked In connections who associate, work or used to work with the competitor
- Conducted deep analysis on the website. Does their content tell us something?
- Reviewed all win/loss interviews. Is there a pattern?
- Finally, outsourced calling into the competitor and mystery shopping to fill in the gaps.
These questions were created around three secrets. These secrets are the foundation for World-Class competitive profiling:
- Be ultra-specific: Focusing on the one item is important. You won’t uncover everything there is to know about your competition. Resist the urge to ask general, broad questions. These questions should be focused on one part of the competition’s sales force.
- Know what questions to ask: Being ultra-specific will allow you to develop engaging questions. For example: “Describe for me your sales process?” is to general. A better question: “How often do opportunities advance from early stage to late stage? What is the main reason for these advancements?” The last questions allow specific answers to our potential problem: Sales Process.
- Use the data to beat them: Interpreting and acting upon the data is key. An answer to the above question could be an advance rate of 35%. How would that compare to your advancement rate in your sales stages? If it’s higher, why is that occurring? Is your sales process buyer centric? These are all implications summed from analyzing the answers.
The competitive profile found some interesting information. Using the three secrets revealed:
Sales Process: Changed the Process to Buyer Centric; Increased in Win Rate of 33%. Do we need to revise ours?
Compensation Plan: On Target Earnings (OTE) within 10% of ours. Fixed/Variable Percentage Pay Mix the same; No change needed.
Territory Design: Created Large Accounts Group; Increase level of trust with Large Clients. Average Sale Price increased 12%. Should we review our Large Accts. Group?
The implications for this company meant examining their sales process and territories. Important focus was placed on these specific areas. And the outcome was pretty large. Revenue increased double-digit in the following year.
Call to Action:
- Identify triggers that a competitive analysis is needed: Are win rates falling? Turnover increasing? Losing big deals to one competitor?
- Determine the reason for the competitive analysis: Are we entering a new market? Did we lose a big deal? Is our best talent being stolen?
- Develop ultra-specific questions around the topic: We don’t want to ‘boil the ocean.’ Place the focus on investigating a few topics.
- Analyze the data: What are the answers really telling us? How would we close the gap through execution?
- Look for these triggers every month: Notice a trend? Conduct a competitive analysis twice a year?
Finding out what your competitors are doing is valuable information. Use these methods to develop a Competitive Attack Plan. If you have one that you would like to share, please leave a comment. Or email me directly. We will share your findings on how you find out this information.
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Dan Perry is the 2014 Top Sales World Gold Medal Award Winner for Best Sales Blog Post and writes on SalesForce.com and in Power Selling Magazine. He is a frequent guest speaker on SLMA (Sales Lead Management Association) Internet Radio and made Evan Carmichael's Top 100 Sales Experts to follow on Twitter.