Our most recent research found that over 50% of companies have noticed a sharp increase in competition. With that in mind, understanding the reasons why customers select one solution over another is critical to ensuring your ongoing competitiveness.
Finding ways to set your company, sales team, and products/services apart from your competitors is more critical now than ever.
We found the best way to do that is by getting feedback directly from your buyers through win-loss analysis. By hearing directly from your buyers (both wins and losses), you receive measurable insights on your product and sales performance. Intelligence you can ultimately use to gain considerable ground on your competitors.
We’ve been studying industry-wide win-loss initiatives for many years and have identified the top seven strategies deployed by successful companies that position them to win in competitive situations.
#1. Define Your Competitive Position
- #1. Define Your Competitive Position
- #2. Commit to Making Decisions Based on Competitive Intelligence
- #3. Make Competitive Intelligence Effective with Cross-functional Teams
- #4. Get Help from a Third-party Company
- #5. Insist on Accountability
- #6. Create Value
- #7. Win-Loss Analysis for Competitive Intelligence
Insight-driven competitive positioning will help you win in a highly volatile marketplace. Your positioning strategy should be influenced by numerous reasons associated with customers’ perceptions, motivations, and requirements as well as by insights into the competition. You should measure your solutions against specific insights in your customers’ feedback, to assist you with this strategic approach.
Your customers’ perception of your strengths and weaknesses against competitors is the driving force behind their final decision. This perception denotes the comparative performance advantage or disadvantage you had against your competition in key decision criteria.
Likewise, knowing your competitive disadvantage when you’re up against certain competitors helps you zero in on specific areas of needed performance improvement.
1.1 Measure with Key Performance Indicators
Key performance indicators (KPIs) are excellent measures to share with executives because they provide a big picture overview of competitive positioning.
KPIs can be used strategically and analytically. For example, managers can evaluate results based only on wins or only on losses. This allows managers to see trends in specific win and loss data, correcting root cause issues and leveraging best practices.
Alternatively, KPIs can be viewed during different time periods, allow- ing leaders to see how performance has improved or worsened over time.
#2. Commit to Making Decisions Based on Competitive Intelligence
This requires participation from key executive stakeholders. The success of any program that necessitates organizational change depends upon a commitment from leadership to not just support the change but to actively participate in the transformation effort.
Including key decision-makers on the CI program team will help ensure that the insights gathered will be used to bring about desired organizational outcomes.
When executive stakeholders are not included from the beginning, the approach shifts to “convincing” leaders to make decisions based upon your findings. The transformation process then becomes much more difficult and frankly, less likely to succeed.
2.1 Why is this commitment to making decisions so important?
Because competitive intelligence is only a means to an end. The end must bring transformative change in the company that achieves desired outcomes. And, change doesn’t happen without a commitment at the highest levels.All your competitive intelligence insights won’t mean much if your company doesn’t use them. You can contract with third-party organizations, study websites, monitor press releases and social media profiles, evaluate public financial documents, and measure market insights, but intelligence without action is just more data.
#3. Make Competitive Intelligence Effective with Cross-functional Teams
3.1 Create a cross-functional team
Research and intelligence that is planned, developed, gathered, but siloed in one department of a company is not going to generate effective change.
We’ve seen high-quality intel that never saw the light of day in other areas of the company that could have used the insight to make impactful changes to achieve desired outcomes.
One of the most important drivers of success is assembling key stakeholders who should work together to act upon the data. The most successful companies put together a strategic team with representatives from Marketing, Product Management, Sales, and Customer Service. The team should be responsible for disseminating intelligence to the key internal stakeholders.
Achieving significant strategic business outcomes requires action on the part of most departments in the company. The business change conversation won’t be effective until every department provides a senior manager to work on this collaborative team and assigns one member to lead to acting on insights and learnings.
3.2 Determine the most effective routes
The first item of business for the cross-functional team is to decide what needs to be understood. A wish list of intelligence can be created, but eventually, this needs to be pared down to goals that can be accomplished and will provide value.
Once you have a team assembled and an intelligence plan, you are almost ready to move to the next steps.
#4. Get Help from a Third-party Company
4.1 Involving a 3rd party ensures unbiased feedback
Objectivity is very difficult under the best conditions and hardly anyone works under the best conditions. According to our State of Win Loss research, respondents who used an impartial third-party received more honest feedback and more actionable insights from their customers than they could have gotten using internal resources. Don’t underestimate the importance of an unbiased voice.
Successful companies acknowledge that they have internal biases, agendas, and perceptions. An objective viewpoint of the marketplace provides value that simply isn’t possible from internal sources.
4.2 Provide a strong voice
Who will be the leader that will promote the necessary changes in the company that lead to outcomes? Ideally, that voice will come from the cross-functional team using the competitive intelligence realized from a third-party managed win-loss program.
#5. Insist on Accountability
5.1 Demand responsibility
You need to set the expectation at your company that intelligent actions will be followed through. Senior leadership will expect reports on intelligence-driven initiatives and you’ll need to keep track of the progress. The cross-functional team should establish metrics for success.
Such metrics might include ROI, new business win rates, market share growth, retained accounts, and minimum client profitability. Competitive intelligence can be an integral part of increasing any one of these metrics.
#6. Create Value
Knowing your customers’ pain points is critical to creating your position. Competitive intelligence paints a picture of who you are up against so you know how to align your solution with your customer’s business needs and from there, you can create a compelling story.
You should be able to answer the following questions about your market and your products or services before positioning your solution.
6.1 What are your customer’s business needs?
Companies who demonstrate they understand customers’ needs can create greater differentiation with their prospects. Understanding customer needs is critical in winning new sales deals.
Most intelligence companies have a list of nine standard sales criteria used in its Win-Loss Interview Guides to determine how effective sales teams are in competitive evaluations. One of these criteria is “Understanding customers’ business needs.” Our research showed it was overwhelmingly the most important criteria customers use to judge sales effectiveness in product evaluations.
Although solution related factors often dominate purchase decisions, sales effectiveness continues to play a critical role in the final selection decision for most customers. This is especially true when secondary and tertiary factors are included in the evaluation beyond the best solution “fit” for the organization’s needs.
6.2 Do you understand the level of effort required by your customers?
Part of a customer’s willingness to do business with a company is their perception of solution benefits, along with the amount of effort required to achieve those benefits.
Having a solution that’s easy to use and provides clear value with minimal effort, will generate a higher likelihood that your solution will be chosen.
Different executives perceive their company’s offerings in different spots on a price-benefit map. Not all of them truly understand the primary benefit their product offers as perceived by the buyer.
And they frequently overestimate their benefits, while underestimating their competition. In the end, it is really about your buyer’s perception, not yours.
6.3 How is your product or service unique?
According to research, 84% of respondents saw no easing in the amount of competition with 50% of those noticing a sharp increase in competition in recent years.
What can you do?
- Identify and focus on the deliverable value that will differentiate you from competitors in the sales process.
- Find product gaps (missing benefits) to improve position relative to specific competitors.
- Collect insights into product differences to narrow the playing field with key competitors.
One customer said about the company they selected, “They have the best quality of service profile of all the companies, the best granular quality of service model. That was another big reason we chose them.”
6.4 How will I address company reputation questions from customers?
Company reputation is one of the most important company-related criteria customers use to help in their selection decisions.
These can include questions around experience in specific industries, as well as requests for customer references. It’s interesting to note that 1 in 5 customers believe companies provide “non-relevant” reference accounts.
One CIO in the business services industry said, “We didn’t have a lot of references that were a similar fit to the kind of resources we were looking for. Ideally, I was looking for a company like our size that was spread out with multiple locations. I could never really get a good, exact fit for somebody to talk to.”
It is critical that you embark on a customer advocacy program to build a strong and broad group of referenceable customers in all the industries you serve. A healthy win-loss program can be the foundation for your advocacy program by helping you identify the best customers to approach.
Once you identify the buyer’s drivers and align your solutions with them, you can position your solution as the one that best meets their needs. Your position should be clear as to why they should select your solution over the competition.
#7. Win-Loss Analysis for Competitive Intelligence
Competitive positioning helps identify the factors important in your buyer’s decision, discover gaps in the competitive market, and predict competitors’ strategies during the next evaluation. It clarifies solution and brand performance versus the competition.
Conducting win-loss analysis will help you become much more conscious of the key factors affecting your sales with each of your customers. Our research revealed over 66% of companies with a win-loss program in place have created competitor profiles.
As you become more experienced with a customer in a specific industry, it becomes easier to understand other companies and your competition in that same industry.
In turn, you’ll win more business and position your company as an expert in that industry. Revenue will continue to grow, especially as your contacts change positions within their respective industries.