Pit your wits

In competitive sport, studying the opposition and their strengths and weaknesses is widely accepted as a fundamental part of preparing to go into battle. According to international sales expert Dave Stein, this approach is just as relevant in a business context, with the very best salespeople always trying to find out who their direct competitors are and develop intelligence about those individuals.

“Knowing your competitors and how they operate is crucial because this knowledge can help you to predict what they will do in various sales situations,” says Stein, who is CEO and founder of ES Research in Massachusetts and newly appointed visiting professor of sales and sales management at Dublin Institute of Technology. “If you know how they are going to behave in a given situation, you can safeguard your position with your customer or prospect by defending yourself against that competitor’s tactics and strategies.”

Most good salespeople will know something about their competitor’s products or organisation, but Stein says very few know about the individual salespeople from rival companies. These, he maintains, are the real competition, rather than the competitor organisations themselves or their products or services.

“It’s important for salespeople to know what their competitors will do when they’re losing,” he explains. “Do they call in management, do they cut their price, do they start lying or bad-mouthing you? If you can predict in advance what they’re going to do, then you can protect your relationship with the client in a way that will enable you to win the sale. For example, if you know the opposition is going to undercut you, you can ask your customer what would happen if someone came in with a lower price. They’ll probably reply that they wouldn’t switch at this stage. This helps to mark their cards. It also gives you the opportunity to explain why reducing your price would only offer a short-term gain. It allows you to set things up so that when the competitor comes in with a reduced price the customer sees it as a negative rather than a positive move.

“However, if I don’t know what my competitor will do, I cannot prepare my prospect to react in a certain way,” he continues. “You can educate your customers and work with them in a way that makes it very difficult or impossible for a competitor to make any headway at all.

“Part of the salesperson’s goal is to learn about the person who is their opponent, who’s contending for the same business,” he points out. “A lot of salespeople don’t ask the questions, are not aware of the importance of this and don’t look at things from as holistic a view as possible. It’s just not enough to do a better job presenting the benefits and the value of your product. There are some terrific products out there that are a lot better than others, but the companies providing them are not doing as well because their salespeople don’t know how to effectively compete.

Stein acknowledges that it is difficult to accumulate information about individual salespeople. “Finding out about the company and the strengths of its products is the easy part,” he says. “Finding out about the shortcomings of their products and services is a little bit harder. It’s even more difficult to find out about how the person who sells for your competitor operates and about their strengths and weaknesses, their approach and who they try to build relationships with and how. And if you do manage to get all this information, things can easily change if that salesperson moves to another company. Getting and maintaining this information is a big challenge.”

One approach, he says, is to get into the habit of asking your customers and prospects certain types of questions in order to collect the data on an ongoing basis. “For example, not enough people ask their prospects about alternatives they may be considering,” he says. “Even those who do ask this rarely follow up by asking questions about the alternative option’s sales rep.

“You can also take advantage of any dealings you have with recruitment consultants,” he says. “If a recruiter calls you up to ask if you’re happy in your job, you can chat for a while and then grill them for information about your competitors. Many recruiters who are trying to build a relationship of trust with you will talk to you about other people. Experienced salespeople know they can ask recruiters, business partners, customers, prospects and other salespeople in their company for information about their competitors. They can also look on social networking sites like Facebook and MySpace.” Other options include joining industry associations and making contact with people who know the competitor.

Accumulating and maintaining this information is time consuming, and Stein believes there needs to be balance. “I wouldn’t suggest that salespeople spend the bulk of their time worrying about competitors,” he says. “Understanding your customers’ requirements and issues and understanding your own products is obviously paramount. It’s also important to spend time honing the skills required to be a good salesperson. But spending no time on the individuals you’re selling against is not the answer either. It’s a bit of a habit that has to be developed whenever there’s an opportunity.”

He also believes the marketing department has a role to play in collecting and disseminating information about competitors. “The marketing department can empower sales reps to gather together this information by putting together some type of technology support platform,” he explains. “It’s important that salespeople – and others in the company – can easily enter any information they learn about competitors into a database. Marketing can help create an environment where it’s understood that this information is important and should be collected. Most importantly, marketing must provide very simple tools and procedures to capture this information and distribute it to the rest of the sales team.”

Stein says it’s obviously more of a burden for smaller companies to gather this kind of intelligence and to analyse and use it in an effective way. “If you have a team of marketing or sales support people who are part of this collection and analysis, it’s much easier. Large companies tend to be able to do this much more readily.”

He points out that certain organisations are more skilled at using the intelligence than others. “Collecting information like this makes it easier to identify where competitor salespeople are making false claims about their product or service,” he says. “Where this is the case, some marketing departments will provide strategies for raising this issue in a professional way to customers and prospects. There are companies that do a terrific job at this and that is one of the reasons they’re market leaders. That’s the kind of information salespeople need if they are to be consistently effective.”

While there is considerable interest among CEOs and sales directors in developing and using competitive intelligence, Stein says the majority of organisations have not adopted rigorous processes for collecting, analysing and distributing this data. “When I go into a roomful of salespeople and ask them if they know the name of the salesperson against whom they’re competing in their most important deal, maybe 20pc of the people raise their hands,” he says. “So there’s a lot of work to be done. In Ireland, salespeople have an advantage because there is a fixed number of people they’re going to be competing against.

“But while they may know who the salesperson is and they may know a little bit about them, they will not generally know how long the person has been selling, how they did last year, what they depend on to win, why they lose, what they do when they’re winning, what they do when they’re losing, when they call in their manager, their knowledge of the industry and the number of companies they’ve worked for in the past 10 years,” he points out. “That can all be very valuable information when you’re competing against somebody.”

While collecting information about competitors is becoming increasingly important, Stein says it is equally important for sales operations to prevent other organisations from getting data about their salespeople. “It is difficult, but there are ways of protecting your privacy,” he says. “One of the simple ways is you always remind salespeople never to be talking about business in front of others. Be very careful with regard to customer lists going out. Vary your email address patterns; for example, you could have a mix of johnsmith@company.com, mary.smith@company.com and t.smith@company.com rather than one standard format. This way, it is much more difficult for people to contact your salespeople opportunistically.

“Presentations have to be marked company confidential,” he continues. “If it’s known that the organisation has a very strict policy and that they will take it to legal levels as required to protect their privacy, then salespeople will be less willing to share information and talk about what’s proprietary. It’s incumbent upon all of the VPs, whether it’s sales or marketing, the MD or CEO to ensure they protect the privacy of their people, just as they would protect their computer system with a firewall.”

While there are many people who are good at competitive selling, Stein says there are considerably more who don’t look at this area at all. “They think they’ve built a great relationship with their customer and they basically leave themselves exposed,” he concludes. “You can compare it to being in the room and leaving the door open as opposed to closed and locked. You may have the best relationship with your customer but you’re not going to close deals if someone comes along at the last minute and says they can do it faster, better, cheaper. You have to protect yourself against intrusion. If you don’t, you’re leaving yourself open to your competitors swooping in and figuratively taking the commission cheque out of your pocket.”

Pictured: Most Formula 1 teams can testify that gathering intelligence on direct competitors offers a distinct strategic advantage. But keep it above board. When confidential Ferrari documents were found in the possession of the McLaren team in 2007, their constructor championship came to an end.

This article first appeared in Marketing Age magazine.