Here’s the situation: You get an introductory chat with a great business prospect, a big company that perfectly fits your target market profile. Not long into the conversation the prospect says, “I’m very sorry, but we are happy with our current supplier. We have been working with them for 10 years and we have no reason to switch to you.’’
You politely reply, ‘’Thank you for your time. We understand. It was nice talking to you and if you are ever unhappy with XYZ Company, please consider us.” Then you proceed to the next prospect on your call list, marking this one a ‘’no’’ because they’re happy with their current supplier -- your number 1 competitor.
Chances are, you most likely began your phone conversation with something similar to this: ‘’Hi. My name is Bob Smith, and I work with ABC Company. We offer high-quality widgets backed by excellent service. We’d like to meet with you to see how you’re currently handling things in this area and how we can help you improve your product/service delivery.”
That’s the classic phone pitch every salesperson gives. Guess what? You will continue getting the prospect’s objection that they don't need your product or service because they are satisfied with their current vendor, your competitor.
Quite possibly the biggest issue in B2B sales is getting a company you want to sell to, to fire their current vendor, your competitor, and switch to your company. Getting a company to fire their current vendor, a company they already have a relationship with and trust, can be incredibly difficult. There are many reasons for this including:
-Change of any sort is a big hassle, especially to large companies.
-You haven’t provided a substantial reason why going through the stress and difficulty of firing their current vendor and switching to you is worth their time and money.
-Your boring and generic sales pitch sounds exactly like 99% of the other salespeople who call them on a daily basis. You sound like another "me too" sheep following the herd.
The old sales cycle of ‘’contact, inquire, present, handle objections and close’’ with little regards to what’s best for the prospect's needs is holding many companies back from selling to companies who already have a good relationship with a vendor who provides the same products or services that your company provides (https://www.jillkonrath.com/sales-blog/an-effective-sales-strategy-to-beat-the-incumbent-advantage).
Dethroning a Competitor
Let’s face it, unless the prospect company called you, chances are they are happy with their current supplier. Instead of convincing them why you are the BETTER choice, you first need to convince them why they need CHANGE.
The best way to approach such a prospect is to check in with them until they experience a trigger event that makes them unsatisfied with their current supplier. The big question now is, ‘’How will I create a trigger event that will make a prospect unhappy with their current vendor?”
Some salespeople say the solution is to contest their decision. However, the problem with this approach is the fact that they already have a working relationship with a supplier, and will most likely take your ideas and then ask their current provider to offer the same as suggested (https://sellingtobigcompanies.blogs.com/selling/2005/01/were_happy_with.html). Also, nobody likes to be told they made a bad decision. All that will do is make them dislike you and want to remain with their current vendor even more.
Your first step should be to look for a chance to show them how much more value you can offer. The key here is to give the prospect the comfort of an opportunity to work with you on something small that (A) won’t cost them much, and (B) won’t require them to drop their existing supplier.
In other words, they should think, ‘’Well, let’s give it a try because we have nothing to lose.” By the same token, this should be a project where you know you can outshine their current vendor and really impress the prospect.
In a nutshell, aim to show that you can solve one of the two most perennial problems in business -- saving your client money or helping them make more money. Do this the right way, and you will have demonstrated your competence without attacking your competition (https://www.inc.com/young-entrepreneur-council/tips-for-negotiating-with-a-supplier.html).
The Augmentation Strategy
Unseating established incumbent vendors requires a totally different approach. You can’t beat them by going head-to-head. You have to sneak in under them using what is called the augmentation strategy. To do this, you need to seriously study your competitor. Every company has a weakness. There might be an open gap in their offer that you can exploit. It might not be as profitable or as scalable as other programs, but it will get your foot in the door. And once you’re in, exploit the opportunity, and inch by inch you will become the supplier of choice. The augmentation strategy is ten times more effective than a head-to-head battle with a long-standing supplier. You begin with a little success and then magnify it from there.
Here are five augmentation strategies you can use to turn the tables in your favor:
1. Find out how happy the prospective client company really is
Find out why the prospect is happy with their supplier. Is it because of their price, quality, service, or a combination? Once you get a handle on this information, you need to probe for more details. For instance, if the supplier is excellent in customer service, you might ask the prospect to rate their customer service on a scale of 1-10. After you get a clear picture of your competitor’s strong points, you can now judiciously plan your next move (https://www.jillkonrath.com/sales-blog/bid/101473/Sales-Objection-We-re-Already-Working-with-Another-Company).
2. Find Out How Long Have They Been Working Together
It takes a lot of time to build a solid business relationship, so whether the current supplier has been in business for one year or ten years makes a big difference. Here, you need to find out who on the prospect’s side is connected to a person on the supplier’s side. This is because the relationship between those two people makes all the difference. For example, you would be in a better position if the relationship was a sales rep and buyer situation, than if it was in a close golfing friend or a college buddy (https://www.forbes.com/sites/allbusiness/2014/09/15/how-should-i-handle-prospects-who-say-theyre-happy-with-their-current-suppliers/#2d9b511cee9b).
3. Strengthen Your Relationship With the Prospect
One of the most effective ways to overcome any relationship obstacle is to try and develop a better one. This means getting to know people within the prospect’s company, and also introducing your own employees to these contacts. It is important to know that creating relationships down the ladder is equally as important as creating relationships up the ladder. A referral from a foreman can prove to be as influential as the one from the VP; it all depends on what you’re selling and to what department. So, when trying to create a working relationship with the prospect’s company, cover all cores (https://www.jillkonrath.com/sales-blog/bid/101473/Sales-Objection-We-re-Already-Working-with-Another-Company).
5. Make Them an Offer They Can’t Turn Down
Making an irresistible offer sometimes opens the prospect’s doors quicker than expected. Here, you can either sell a product at half its cost or deliver services below your standard rates. Sure, lowering your rates can be held in low reverence, but if they are executed in an intelligent and sensible manner, they work, and that’s what matters the most. On the same note, it is irrationally seductive to offer a freebie to a client when you’re competing against incumbent suppliers. The truth is, when you easily give away things for free, people will place far less value on them (https://www.linkedin.com/pulse/effective-sales-strategy-beat-were-happy-our-current-provider-jill).
5. Be Persistent
Once you’ve exhausted all possible strategies, don’t give up on the prospect just yet. Sooner or later, your incumbent competition will make a mistake. It always happens. Also, people will come and go at your prospective client's company, and new hires may want to make big changes, and they will open the door to bids from new suppliers. And, your company may develop new products and services that your competitors do not offer and that your target market desperately wants and needs. Therefore, always keep the relationship alive with your prospects because in due course, you will get a chance to become the new vendor. It may not happen today and it may not happen tomorrow. But, it will happen. It always does.
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