Every company has to face it sooner or later—selling against that entrenched player in your space. You know the one. They are the guys with the industry standard solution; they have every bell and whistle known to humanity. No one every got fired for picking their solution, even if it is weak in some areas. What do you do?
There are a few key steps you can take that will maximize your chances of winning, or minimize the expenditure of resources in an unwinnable situation. I ran into this situation 3 weeks ago, and was reminded again of all the painful lessons (and a few glorious wins) that I’ve gotten at the hands of the 800lb gorillas in several industries.
Step 1: Tell the customer why they should buy your solution
There is no reason for someone to take the risk of buying a new solution, rather than the industry standard, unless there is a big payoff. Why should the customer take the risk of buying your service or product instead of the safe choice? You not only need a crisp answer, but one that translates into dollars and cents. Be prepared to explain your advantage. Provide examples and references. Hammer the point home.
In our case, we presented to a large prospect that wanted internet distribution for their product. We have an excellent network, with far broader distribution than the gorilla. We drove the point home, and at least 3 or 4 people in the presentation nodded their agreement. So far, so good.
Step 2: Understand the politics in your customer’s organization
Picking a new, risky vendor is an inherently politically charged situation. Is there someone allied with the gorilla at your prospective customer? You better identify them, quickly. They will try to shoot you down at every opportunity. Is there a new person on the scene who has reasons to pick an radical new solution? Some of my best supporters have been young managers who are anxious to do something new and bold.
In our case, the gorilla-lover constantly argued, and continually raised new challenges. Can you do this? Can you do that? What about a call center solution? The gorilla has one, so where’s yours? What about the security certification that the gorilla announced last week? Do you have one yet? I wanted to throw something at him.
What he didn’t know was that we had an ally on the senior management team. I had out-flanked the gorilla-lover by having some discussions beforehand. Without that political support, we would have been on the defensive throughout the presentation.
Step 3: Know when to cut your losses
There will be times when you simply can’t win, and you need to identify those situations before they consume your scarce resources in a losing cause. Without the support of the Senior Management player I mentioned, my sales effort would have been wasted. Worse, I could have been drawn into trying to match the capabilities of the gorilla. There is always a temptation to say “I could build that, too” or something equally foolish. Why would anyone buy your promise to duplicate the gorilla’s solution over time, when they could by the complete solution from your competitor now?
To win, you need a decisive advantage, but that is not enough. You need to cultivate allies in the target company that value that advantage, and are willing to take some risk to get it. If either of those key components is missing, think hard about whether you should proceed.
These are hard calls. Prospects are few and far between, especially large ones. Giving up on prospect runs counter to our belief in our business, and can be hard to explain to the rest of your team and your investors. Know yourself, and pick battles you can win. Remember, if you engage to early and lose decisively, you may never get another chance at the prospect. If you choose to fight again another day, you are still in the game.
By the way, we ended up getting part of the business at the prospect I mentioned. Politics carried the day. Our Senior Management ally gave us 40% of the business. Wisely, he chose to test our services, and use our presence to beat down the gorilla’s prices. Everybody won, except the gorilla. We got a healthy fraction of the business, and our executive ally looked statesmanlike for testing us in a prudent way.
