Steve Thompson, Founder of Value Lifecycle and Author, attempts to help you answer this question in the Irresistible Value Proposition, the second installment in his Must-Win Deals series. Steve proposes a four-part test to help you determine the best way to beat your competition.
1. Determine your objective
First, you need to know whether the objective for the account or opportunity is to:
- keep the current account,
- land a new customer,
- or upsell or cross-sell an existing account.
2. Assess the strength of your offer versus the customer’s desired outcomes and most likely alternative
You then need to understand the customer’s desired outcomes. Consider the well-known saying that “customers don’t buy a drill, they buy a hole.” Then perhaps go a little deeper – why would the customer want a hole? For example, maybe the customer wants to hang blinds. If they do not buy your drill, they would have essentially three options:
- Go with the competition (a different drill or hole-making device)
- Do nothing (do not hang the curtains at all)
- Do it themselves (use another method of hanging curtains that does not require a drill)
With each of these options, the sales professional will have to tailor their strategy, value proposition, and negotiation technique to the specific alternative.
3. Does the customer acknowledge that we have an overwhelming advantage?
You might be able to use a features and functions presentation with the customer if the customer truly acknowledges that you offer a much better solution than the alternatives. We need to emphasize that this advantage much be objectively better – no comparison. Consider if you offered a drill that costs only $10 and can drill the holes that are needed, the cheapest alternative drill is $50, and the customer places at least $20 of value on its ability to hang the curtains. If this is not the case for your situation – and it probably is not – move on to #4.
4. Can you change the customer’s decision criteria to focus on key desired outcomes?
If you can convince the customer that your solution will likely result in the achievement of the customer’s desired business outcomes, you can likely get the sale despite the lack of overwhelming advantage. This is what Steve Thompson calls an “indirect sales strategy.” Steve explains that it entails “changing the game” or more to the point, changing the decision criteria the customer uses to make a buying decision.
Your goal is to make the decision criteria about the desired outcomes rather than features and functions or price (or both), thus changing the game to one where you have a much higher probability of winning. For example, can you produce more or better outcomes in a set time frame? If so, you can offer a better value to the customer than features and functions or price, and you will have a significant advantage.
If your answer to #4 is no, move on to #5.
5. Can you move into a position to compete if you are given more time?
Even if you cannot sell your offering based on its likelihood to achieve the customer’s desired outcomes right now, you might be able to if you have more time to gather information, or maybe you think there is a strong likelihood that circumstances may change. If so, you should simply delay the decision (delay the sale) by slowing the negotiations down. If not, you should strongly consider whether you should even be pursuing this deal. Most wasted sales efforts are spent chasing opportunities that are not likely to close, and it is better to simply redirect this time to better prospects.
To learn more, you can find Steve Thompson’s book on Amazon.com here.