Competing Against Alternative Solutions

by Stephen E. Heiman and Diane Sanchez with Tad Tuleja

The competitive situations that people face today are much trickier and more intense than they've ever been before. There are four basic reasons that this is so. These relate to lack of differentiation, increasing savviness in the marketplace, the rise of different types of competition, and an obsession about what the "other guy" is doing.

Lack of Differentiation

The bold and dark line that every good salesperson would like to have between her products and the competition's is getting fuzzier. Lack of differentiation between competing products or services is becoming endemic rather than accidental. There are very few products or services out there today that are perceived as providing a unique advantage in themselves. So, if you rely on product differentiation to keep you ahead, you'll be locked in a quarter-to-quarter game of marketplace leapfrog.

The Savviness Factor

Your customers are getting faster and smarter, too--better informed about available products and services, less compliant when confronting product "experts," and more insistent about demanding customized solutions. The salesperson is no longer "the expert." Today, most of your customers have done their homework. They already know what bells and whistles you can offer. And they know that your competitors are offering much the same things. As a result, they can often use price as a lever. You and your competitors are forced into a dogfight over bones.

New Types of Competition

The traditional image of the competitor is another salesperson (or firm) that is trying to secure the same piece of business that you are. Actually, that is only one type of competition. Competition is any alternative solution to the one you and your company are proposing. Buying from somebody else is one alternative solution, but consider the following scenarios:

• Using internal sources.The company you're approaching decides that it's more efficient to provide its own solution to the problem you're addressing than using its own resources.
• Using the budget for something else. Similarly, a company that is thinking about your proposal may decide that the necessary funds should go elsewhere -- not to one of your direct competitors, but to a project that isn't even related to what you sell.
• Doing nothing. Although few people in business would identify inertia as a competitive pressure, sometimes that's the most serious one of all. A customer may decide that it's not worth it to spend the time, money, resources, or personnel to accomplish something new.

In all three of these cases, you're really competing for the customer's decision to allocate resources to your solution rather than to any number of alternative solutions.

Obsessing About the Competition

Competition is tough because we make it tough. Rather than remembering that no one is invincible, we construct an image of the competition as a combination of Albert Einstein and The Terminator--infinitely smarter and ready to eat us for lunch. The field of possible alternatives becomes The Competition, larger than life and virtually indestructible. But this is one of the commandments for losing in business: to concentrate on the competitor rather than on the customer.

A competitive strategy focusing on the competition is, naturally and inevitably, a reactive one. A reactive strategy allows the competition to write the rules of the game, it points out your weaknesses, not your strengths, it invites price slashing, and--worst of all--it deflects attention from the customer's needs.

So What's the Alternative?

The alternative is to think far less about what the competition is doing, has done, or might do, and much more about what selling is about in the first place--providing a customized solution to an individual's problems. Competition-driven strategies sidetrack you from your professional mission. A strategy that puts you back on the track must be pro-active, not reactive; must focus on the customer, not the product; and must enable the customer to recognize a significant contribution.

Being pro-active is more efficient because you set the agenda and the standards. You spend the time analyzing the situation to be sure that you are as effectively positioned as you can be. The job at hand is to solve the customer's problem. A pro-active approach keeps you focused on the target.

If the worst competitive strategy is to focus on the competition, the second worst may be to become so enchanted with your own product that you imagine you can beat the other guy just by trumpeting its virtues. You must understand the customer's idea of what doing business with you will accomplish before you can hope to make headway with benefits or specs.

To compete effectively, you've got to be different from your competitors. More important, you've got to be perceived as different--and different in a way that makes a difference to the customer. That something might relate directly to your product or service, or it might not. It might have to do with the broader aspects of your business relationship. When that's the case, you have a unique competitive opportunity if you can demonstrate to the customer that the "something" you bring to the table has value for his or her company and cannot be obtained anywhere else. We call this a contribution, and it's one of your most potent competitive weapons.

As the bold, dark line of differentiation becomes increasingly fuzzy, you need to think less of "the other guy," less about the bells and whistles of your widget, and more about the needs of your customer and what you bring to the table. That's the only way to ensure that your solution is the best of the available alternatives.

Adapted from The New Strategic Selling® by Stephen E. Heiman and Diane Sanchez with Tad Tuleja © 1998 by Miller Heiman, Inc. All rights reserved by permission of William Morrow & Co., Inc.