A salesman and an economist are walking down the sidewalk. All of a sudden, the salesman looks down and sees a twenty dollar bill.
“Look, a $20 bill is on the ground,” he says, reaching to pick it up.
The economist coolly replies, “Can’t be. If there was really a $20 bill, somebody would have already grabbed it”.
This is a common economist joke in a not-so-long list. But the adage also holds true for sales and marketing leaders. When a new initiative is proposed, the first question is: “Is anybody else in our industry doing this?” This really means: “If it worked, somebody else would have already done it.”
The assumption is that competitive activity validates the project. This is a terrible approach for two reasons.
- It Shows a Complete Lack of Vision from the Leader. If you want to be the first, you’ll have to try new things. Asking about the competition tells the CEO that you are content to follow. With this attitude your growth rate will never surpass the industry rate.
- Your Competition Should Never be the Barometer. It should be your targeted ideal customers. If it helps you sell to them, it’s worth it. Many businesses have failed because they didn’t tailor their approach to changing buyer behavior.
Download our Customer Traction Guide when deciding on your next project. It asks the questions you need to answer for your customers and your company.
Here are two examples of projects that failed to account for Buyer Behavior:
Social Media: The division of a Fortune 500 Company relied almost exclusively on government contracts. After the competition launched an aggressive social media campaign, the Sales VP followed. He bet on a Social Media strategy project assisted by a 3rd-party technology company. It cost $500k. The project was a disaster. None of government clients were on social media. Facebook posts and Tweets were broadcast to an empty arena. Their customers preferred DC steakhouses and closed door meetings. The competition headed down a dead-end. And the VP followed.
Inside Sales: A Fortune 100 company rejected an Inside Sales team project. “Our clients prefer face to face interaction. Every one of them tells us this,” said the VP of Sales. “Look around. None of our competitors use inside sales.” Six months later, the competition activated an Inside Sales division targeted at the company’s SMB customers. They promised faster service. Their prices, unburdened by a field sales force, were 20% lower. It was a no-brainer. Customers happily agreed to transfer their business. The Fortune 100 Company lost 15% of their market share by the end of the year.
A VP of Sales should evaluate every project through the following lenses:
Customer: Is this something our target audience would prefer? Does it make interactions easier, transactions cheaper, or add more value? If the market is moving that direction, don’t wait. Provide an offering before your competition.
Effort: Will this project and new behavior be easy to enforce? Does it ask your sales team to develop a radically different skill? Is there a reinforcement plan to properly execute the project? What are the big risks to account for?
Payoff: What is the payoff of executing this properly? Will this drive significant revenue? Save costs? If this is an industry first, look for outside companies who have undertaken a similar project.
Don’t reject a project simply because your competitors have ignored it. The market rewards companies that move first. Download our Customer Traction Guide to determine if your project will stick. Get ahead of the competition, and improve your customer interactions.