Ask the Sales Doctor - Total Selling Systems

Warren Wechsler's
Ask the Sales Doctor

Facing a Competitive Threat

Warren Wechsler, bestselling author and national sales and motivational speaker, provides many valuable resources free of charge to sales trainers and sales managers. Some restrictions apply to the use and distribution of this information. For more valuable materials, visit Warren's web site www.totalselling.com. All materials and content © Warren Wechsler, 2001 – All rights reserved.

Robin Berger writes:

I'm facing a serious competitive threat for the first time in my territory after being dominant for over ten years. My new competitor is very aggressive, cuts prices to get the attention of my best customers, bad-mouths my company, and generally is becoming a real pain in the…Well, it’s starting to affect me, and now I wonder if I can fend off the attacks. What can I do to fight back?

Warren answers:

Hmmm. Thank you, Robin. That's a tough question. I wonder if you could say that word, that anatomical word on the air. But you can't. We'll just say BEEP. They're a pain in your BEEP. Well, it's interesting. I've got a couple of responses.

You've been the dominant player for over ten years, Robin. And my question is - I'm not trying to insult you - have you rested on your laurels? Have you gotten lazy about your clients? I'm not accusing you of that. I'm just asking you to consider that. Because if you have, one of the solutions is to remember what it was like when you were not the dominant player in that territory and start getting back into that hustle where you are out hustling this competitor, and you have that energy and enthusiasm to go back after that particular business that is being attacked by this competitor. So that's my first reaction.

I've got a really strong point to make. You mentioned that this competitor is bad-mouthing your company. Let me caution you. No matter what you do, don't get down in the mud and slug it out with this other competitor. Don't go on the Internet and try and dig up dirt on them, and when they bad-mouth you, you can bad-mouth them better than they can bad-mouth you. That is a losing proposition. If you're hearing from your clients that this particular competitor said such-and-such about you, or they're telling your customers how wonderful they are, all you need to do is say, "Hey, you know what? They're a great company." And then pause, one-one-thousand, two-two-thousand, and then go right back into your own attributes or your own benefits. Don't get into those battles where you're trying to slam them and they're trying to slam you. It's a no-win proposition, and it makes you look bad in front of your customer base because they think, "Well, gee whiz, why all of a sudden do you have to be slamming your competitors. I've been loyal to you, Robin, for ten years. Just treat me the way I've been treated, and you will get that business, or at least you'll have the right to earn that business, and continue to have that relationship."

And by the way, I'm happy that your clients are willing to share with you that you're facing price competition. They basically could just go away and think that you were ripping them off all these years.

The other thing that I would do is what's called a SWOT analysis. That stands for strength, weakness, opportunity, and threat. I would do that for me, my company, and the other competitor as well. On my side of the ledger I would focus on strengths and opportunities; and on the other side of the ledger I would focus on weaknesses and threats that my competitor would have trying to compete against me. So I would focus on the positive. You know what they say. "Accentuate the positive and minimize the negative." So I would focus on what I'm good at, and then I would try and learn where the weaknesses are on this new competitor. Again this is without ever slinging mud or talking negatively about them. You can say the same things in a positive way.

And then finally, on this whole price thing, that's a real sticky wicket. If you drop your price to match this predatory pricing that this new competitor is doing, your client base might wonder, "Why did it take something like this to precipitate your dropping your price? Why didn't you give me those good prices before?" So my suggestion to you would be…Let's take an example where you're charging them $1.10 for some item in bulk, and this competitor is offering it to them at $1.00. I'd say, "Well, at $1.00 my company can't make any money. And we take that profit that we make by working with you and we use that to enhance and make sure we're adding value. I can't match that price, but I can reduce my price temporarily by three or four percent just to show you in good faith that I'm willing to give you even more. I'll continue to give that great service. But I want you to know that if it's that pricing issue that's really hyper-sensitive to you right now, I will do some price reduction to let you know that I'm operating in good faith although I won't match that price."

So they'll see that you're willing to give a little bit, but you're not willing to match the price because you know what happens? They'll say, "Well, they dropped it again. They dropped it again." They'll keep beating you up and pretty soon you'll find yourself in the commodity business which you don't want to be in.

This was a partial transcript from Warren Wechsler's weekly radio show. Warren Wechsler, bestselling author and national sales and motivational speaker, provides many valuable resources free of charge to sales trainers and sales managers. Visit Warren's web site www.totalselling.com Also, listen to Warren's weekly radio broadcast Wednesday's at 4:05 - 5:00 pm Central time, on KMCD-AM 1570AM. Shows are broadcast live on the internet at http://www.warpradio.com/asx/KMCD-AM.asx