B2B Street Fighting Blog

there is a very tough competitor lurking out there...

Posted by K. (Karen) G. Fraser on Thu, Jun 27, 2013 @ 09:41 AM

there is a very tough competitor lurking out thereAnd most salespeople never think about!  It is not human. It is not department or LOB-specific.   But it is there every day.  And very often this competitor quietly causes your deal to ‘go away.'

The competitor?  ‘AU of F/C’ – Alternate Use of Funds or Capital.

Almost all customers these days have limited budgets.  The typical customer prioritizes their projects or initiatives.  Once project prioritization is complete the available budget will be allocated to those projects according to priority.  It is very rare that there is sufficient funding to cover every initiative on the list.

What if your deal is not among the customer priorities that the budget will cover?  Do you know which projects will be covered by the available funds? Do you know the customer prioritization criteria?  And very importantly, do you know what priority your project ranked? 

Now your real competitor is starting to take shape.  Your real competitor is not only the projects that will be funded according to customer priority.  Your competitor is any initiative that the customer considers to be higher priority than yours. 

When you consider the first key question in value exchange, "what happens if there is no deal?," part of your discovery activity needs to examine what the customer will do if they do not do a deal with you.  When your customer does not see your project (or deal) as one of their high priorities, the customer will invest in their priority projects.  This might well mean that your project (or deal) is unfunded. When your project is unfunded, where does that leave you?

'Alternative Use of Funds or Capital' is a tough competitor that we can't see but it is there every day in every account.  Conducting a thorough CNA analysis is an effective way to help you stay alert to the customer's priorities and ensure that your project is among the prioritized (funded) initiatives.

Tags: negotiation skills for sales

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