There is a science and an art to sales.  The science is the research and analysis that goes into any potential deal – to qualify the deal, and developing the deal through the sales cycle.  The art is the creativity of the sales team to create good offers/options to present to the other side in order to maximize the probability of reaching an agreement. 

Yet it seems that sales teams are often surprised to find that their ‘real’ competitor is not the competitor that they assumed.  They usually discover this after they find out they have not won the deal!  Did they really understand the competitive landscape of the deal during the sales cycle?  When I ask sales teams what/who their competitor is in a deal, they usually identify another supplier.  But this is not always the case and if you do not know who or what your ‘real’ competitor is, how can you differentiate your solution from the competitor?  And very importantly, how can you take pressure off price when you cannot differentiate because you do not know who or what your ‘real’ competitor might be?  This makes it easy for the buyer to negotiate on price only when they believe they can make an ‘apples to apples’ comparison between your solution and that of other suppliers.

How can you uncover your ‘real’ competitor in any deal?  The most effective way to reveal your ‘real’ competitor is by asking the question ‘.. what would the customer do if they do not come to an agreement with you?...’   In other words, if your customer or client does NOT come to agreement with you, what would they do? 

As salespeople, we like to assume that we will come to agreement and work to make this happen. While it may seem counter-intuitive, what if you were to pause and ask the question ‘What would your customer do if they do not come to an agreement with you?’  Taking time to explore the answer to this question can reveal so much for any sale team.

If the other side does NOT come to agreement with you, what could they do? Generally, they could:

• go to a competitor/ another supplier
• or do nothing (this includes waiting until some point later or finding a smaller deal)
• or they could try to build/do it themselves

In reality, the other side (buyer/customer/client) will prefer one of these alternatives. They will not prefer every one of these alternatives unless they break the deal down.  As early in the lifecycle of an opportunity as possible, it is important to understand which of these alternatives the other side prefers.  Their preferred alternative is important for you to know. Why?  Because the customer’s preferred alternative to coming to an agreement with you is your ‘real’ competitor! 

Here is the key – when you reveal what the customer would do if they do not come to an agreement with you, then you will know that any offer you make will be compared by the other side (buyer/customer/client) to their preferred alternative to coming to an agreement with you.  The other side will only come to an agreement with you if your offer is better than their preferred alternative.

When you know the other side’s preferred alternative to coming to an agreement with you, then consider the impacts to the other side if they do not come to an agreement with you.  And don’t fall into the trap that there will be only negative impacts to the other side if they do not come to an agreement with you.   There will always be positive impacts to the other side if they do not come an agreement with you (i.e. budget to invest in other projects).

Examination of the impacts to the other side if they do not come to an agreement with you will help you to understand which side has more power in the deal. 

So challenge your account team ... ask ‘what would the other side do if they do not come to an agreement with us?’  This is the best way to uncover your ‘real’ competitor in any deal!