06 Jun Is Competition in a Sales Deal Always Detrimental?

When pursuing a prospect in the sales cycle, it might seem advantageous if there is no competition. Indeed, discovering a lead and completing the sales process without the threat of a competing supplier can be less stressful, as no competitors are highlighting potential shortcomings of your company or product. Such scenarios are uncommon and should be celebrated when they occur. This has become even rarer since the pandemic, which has made access to prospects more challenging.

However, competition can sometimes be beneficial in closing an opportunity. This may sound counterintuitive, so allow me to elaborate.

An essential aspect of ensuring that time is not wasted on an opportunity that will never close is for the sales pro to perform a thorough qualification. Questions such as whether the project is within this year’s budget, if it has an executive sponsor, and who that person is, as well as understanding the actual reason behind the purchase, are crucial. That includes determining what the problems or issues (pain point) with the current solution they hope to fix, what is working or not working now, and what other solutions or competitors they are you considering.

The presence of other competitors indicates a viable opportunity.

If other competitors are also engaging with the prospect, it suggests that they have conducted their qualification process and deemed the opportunity legitimate. While we may not know how rigorously they qualified the deal, their continued interest typically signals that it is indeed a real opportunity likely to close. Consequently, it becomes vital to outperform these competitors, including the most formidable competitor.

The primary competitor is always “Do Nothing.”

Even in the absence of other suppliers, the primary competitor remains the option to do nothing or maintain the status quo. This competitor poses the most significant challenge and is often the most frequent cause of lost opportunities.

It is a black hole—the lack of inertia that prevents change. Buyers are naturally inclined to favor the status quo. They know it, have lived with it (“we have always done it this way”), and are often comfortable with the status quo. It is often the easiest and least risky choice. Anything else will result in an adjustment, and most people do not like change. The default position is to maintain the current solution, even if it is recognized as suboptimal, unless there is a compelling reason to make a change. ¹

Sales pros must always consider that the prospect needs a compelling reason to make the change.  That is your value proposition.

Competitive efforts can drive the opportunity forward.

As you guide your prospect through each step of the sales cycle, your competitors are simultaneously working towards the same goal: closing the sale. They engage in discovery, assess needs, quantify value, present proposals, and attempt to close the sale. Their efforts to persuade the prospect away from maintaining the status quo can be beneficial, provided that the prospect ultimately favors your solution over theirs when they make their decision.

An analogous example is seen in the rivalry between Coca-Cola and PepsiCo. Their competition, primarily through advertising, increases consumer awareness and overall market spending on beverages. Even brands like 7-Up and Dr Pepper benefit from this heightened competition. The idea here is that the collective effort often yields greater results than isolated efforts.

To conclude, I do not advocate for inviting a competitor into an ongoing sales opportunity, as this would be detrimental and stupid. However, recognizing that the presence of a competitor can bring certain advantages is crucial for effective strategizing.

¹ Steven Weinberg, Above Quota Performance (Estes Park, CO: Armin Lear Press, 2022), p. 93