As I study the trends that are impacting sales and marketing performance, one thing is clear. Competition is strong and it is only getting stronger. While competition can be great for consumers, how is your organization being impacted? And more importantly, what can you do to end up on top of the heap?
There are a number of reasons for the surge in competition. Here are four big ones:
- Post-economic downturn survival. A lot of companies didn’t fare too well in the recession. But like any recession, the ones who survived did so by becoming even more competitive and upping their game.
- Increase in start-ups. Whether you’re in the U.S. or abroad, the trend is a rise in start-ups. There are a number of factors driving this, from a record number of young people, Millenials, taking the entrepreneurial plunge to an uptick in the economy opening up funding and opportunities.
- Technology leveling the playing field. One of the reasons why so many start-ups can compete and play with the big boys is that technology is a great equalizer.
- More global competition. Driven by an interwoven global economy and the technology that allows easy access and communication, many industries are not only facing local or domestic competition, but the onslaught of global competitors.
The bottom-line is that strategies that worked as recently as a few years ago are no longer valid. So the question to be answered is, “What can you do to beat the competition?”
A knee-jerk reaction that many companies make is to reduce prices. And while this has been proven not to build long-term customer loyalty (see my last article), it can create some disruption in the marketplace and give other competitors some sleepless nights. This is not a strategy I would endorse. Consequently, it does make some other strategies more compelling to execute.
According to research by CEB and my own experience working with clients, a better strategy is to determine what makes you truly better in a way that is valued and relevant to your customers. I call it your “Unparalleled Value” and the challenge that most companies have is that their differentiators are really not all that different in the eyes of the customer. In fact, CEB’s research found that ONLY 14% of companies have “so-called unique benefits” which were perceived as both unique and beneficial by clients. It’s no wonder that salespeople often resort to selling on price; they are neither armed with reliable advantages nor equipped and trained to be able to understand and communicate how they can better address the concerns of their customers.
According to a recent article in the Wall Street Journal, major customers are increasingly seeking to control supply costs with single-source competitive bids. Talking to industry experts, I can confidently say, it’s not just related to controlling supply costs. Do you have a strategy that not only makes you a single-source provider, but one that makes you THE single-source provider of choice?
Or perhaps you don’t have the size, sophistication or resources to be a single-source provider. If that’s the case, a different competitive strategy may be needed. Can you partner with a larger provider to provide something to enhance their offering? Can you find a smaller market or a creative approach to carve out your niche?
With any strategy, it comes down to making your products or services BETTER. They need to be BETTER than your competition in ways that are valued by your customer. In this ultra-competitive day and age, being “good enough” is no longer enough.
