Competitive_Analysis-1

 

Every sales leader wants to know what their competitors are doing. Knowing how your competitors are enabling their sales force can provide an advantage. But most Sales VPs don’t know how to do it. They confuse competitive profiling and benchmarking.

 

We get asked to benchmark the competition frequently. Although benchmarking includes competitors, it is not competitive profiling. Benchmarking allows a comparison of you against your peers. This peer group is typically made up of 30-40 companies. Alternatively, competitive profiling enables you to deeply understand one competitor. This is extremely beneficial when targeting a single company. And there are specific ways to accomplish and use the data to be effective.

 

We recently advised a client how to perform a competitive profile. Why? There was a 67% increase in lost business to one competitor. The past 6 months have been brutal. The win/loss interviews were too general to really uncover the root issue. Lost customers indicated they ‘matched the solution to the problem’ better. Or they felt a ‘better level of trust’.  Another mentioned ‘superior installation references’. Not one thing stood out. It was time for a competitive profile.

 

We brainstormed with the client and decided to limit our investigation to three items.  We chose these:

 

  • Sales Process: We wanted to get our hands on their sales process. Did they recently deploy a new, customer-centric sales process?
  • Compensation Plan:  Did they change their compensation plan incenting more new business vs. account development? Is this new compensation plan attracting more talented sales reps?
  • Territory Design:  Have they realigned territories putting their best people where the most market demand is?

 

We then developed questions to ask the competitor. And started asking:

 

  • Current sales reps who used to work for the competitor
  • Channel partners who represent both products
  • LinkedIn connections who associate with, work with or used to work with the competitor

 

We also conducted deep analysis on their website. Did their content tell us something? We then went back and reviewed all win/loss interviews. We looked for patterns. Had we missed someing? Finally, we outsourced calling into the competitor and mystery shopping to fill in the gaps.

 

The questions were created using three tips. These tips are the foundation for best in class competitive profiling:

 

  1. Be ultra-specific: Focusing on the one item is important. You won’t uncover everything there is to know about your competition. Resist the urge to ask general, broad questions. These questions should be focused on one part of the competition’s sales force.
  2. Know what questions to ask:  For example: “Describe for me your sales process?” is not going to tell you much. A better question would be: “How often do opportunities advance from early stage to late stage? What is the main reason for these advancements?”  These types of questions will help you pin point potential problems.
  3. Use the data to beat them:  Interpreting and acting upon the data is key. An answer to the above question could be an advance rate of 35%.  How would that compare to your advancement rate in your sales stages? If it’s higher, why is that occurring?  Is your sales process buyer centric?  These are all implications summed from analyzing the answers.

 

The competitive profile found some interesting information for our client. The implications for this company meant examining their sales process and territories.  Important focus was placed on these specific areas and the results were signficant. Revenue increased double-digit in the following year.

 

So, What’s Next?

 

  • Identify triggers that a competitive analysis is needed: Are win rates falling? Turnover increasing? Losing big deals to one competitor?
  • Determine the reason for the competitive analysis: Are we entering a new market? Did we lose a big deal? Is our best talent being stolen?
  • Develop ultra-specific questions around the topic: We don’t want to ‘boil the ocean.’Place the focus on investigating a few topics.
  • Analyze the data:  What are the answers really telling us? How would we close the gap through execution?
  • Look for these triggers every month:  Notice a trend? Conduct a competitive analysis twice a year?

 

Finding out what your competitors are doing can be very valuable. Don’t fall behind.  Instead, subscribe to the SBI Magazine. We’ll bring you the latest insights on what your peers are doing, every quarter of the year.