On this episode, Paul tackles the tough situation that arises from selling to your customer’s competition.
Be wary of mentioning other customers as social proof. If asked though, be transparent.
Get feedback from your internal champions and try to determine the root cause of the customer’s concerns.
Invoke some empathy. Chances are this customer sells to their customers’ competitors.
Remind the customer that your relationship is built on trust.
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What if my customer stops buying because I sell to their competition?
(Transcribed from podcast)
On today’s episode, we have a question coming from the website. So this is a reminder to all of you out there. If you have a question, please visit TheQandASalesPodcast.com. While you’re there, you can ask me a question. Also, you can use that search function to see if we already answered your question on a previous episode.
So let’s get right to it. We’ve got a question from Jason. Jason sells explosives. He actually sells for a company that manufactures explosives to help blast rocks and quarries and things like that. So, Jason’s question is kind of an interesting question. I must admit this is something I have I’ve run across in the past, and so we’re going to talk about that today. But the question is, “What if the customer stops buying from me because we’re selling to their competition?” Think about that question for a moment. What if the customer stops buying from us because we’re also selling to their competitor? Tough question, but we’re going to get to it today.
Before we do though, a quick shout-out to our sponsor, Andrea, over at The Creative Impostor Studio. It’s just a wonderful, wonderful resource for your podcast, to get your podcasts going, if you want to need editing, producing. Whatever it is that you need, reach out to Andrea and her team. They do an absolutely wonderful job. They do a great job. So we’re going to have a link over to her website on this episode’s webpage.
Also, I got big, big, big, big, big news. Today, I found out that Selling Through Tough Times, my new book which is going to launch September 28th, is now available for pre-order on Amazon. So we’re going to have a link over to that pre-order form. It’s pretty simple, straightforward. Go onto Amazon. You can search Selling Through Tough Times, or you can just follow the link that we’re going to have on this episode’s webpage. Again, you can, pre-order your copy. It will be released on September 28th.
So let’s get back to that question: What if the customer stops buying from us because we sell to their competition? So I’m going to share just a couple of thoughts in general as we get to this question. I know this is something that I’ve run into personally with some of my clients actually, because what oftentimes will happen, I will work with competitors in the same industry. And I always jokingly, I add a little levity to the conversation because I will tell sales leaders, “Look. it’s not a bad thing that I’m working with you and I could be potentially working with one of your competitors. The reason why is my whole message is about selling value. It’s about selling at higher margins. It’s not about going out there and discounting. So this is like the closest thing you can get to legal price fixing.” And that usually sparks a little bit of laughter and helps ease the concern. But it is a legitimate concern.
Let’s think about this for a moment if we are the customer. So we are the customer and our supplier, or our provider, is not only selling to us, but they are also selling to our competition. Think about their concerns. They’re concerned about sharing information, they’re concerned about getting deprioritized if the other customer needs your help and there’s constrained resources. There’s a number of things that are going on in their mind, especially when people talk about their competitors. When two companies compete with each other and, let’s say, they’re really tough competitors, very competitive in that they both want to win, they’re going to be wary of working with partners that are working with both. So that’s just something to be aware of and that’s a legitimate concern. It’s all about the messaging and how we can help the customer.
So with that being said here’s a couple of tips. Number one: be wary of mentioning other customers that you’re working with from the very beginning. So my advice to you, Jason—and I don’t know if this is how it went down because we just don’t have the information—but I wouldn’t mention that you’re working with other competitors. I wouldn’t mention them as social proof. You know, a lot of times in sales, we like to mention some of our customers or clients because it helps provide social proof. Especially when we work with bigger companies that are well-known, we like to mention that to perspective customers. This is a case where I’d be wary of mentioning who you are partnering with.
Now, when your customer directly asks you,” Hey, are you working with my competition?” we want to be transparent. We want to be honest there, but we don’t want to lead with that. And the reason why is because it’s really none of their business who we’re working with. Your goal is to create value for that customer. In that vein, it doesn’t matter whether you’re working with their competition or not. Your sole responsibility is to create as much value as you can for that customer. So, thought number one, be wary of mentioning other customers that you’re working with, especially if it’s a competitor of the company you’re meeting with.
Number two. In this case, Jason, as you mentioned in your question, you said, “Hey, they stopped buying from us because we’re selling to the competitor.” In this particular instance, you mentioned that they promised you some work, and then when you guys showed up to complete the job, it was already finished by your competition. Clearly something’s going on here. So my second thought for you is to reach out to your internal champions at this customer. So think about the customer, the high-value target that you’re focusing on—the one that went to your competition. Seek out your internal champions, those field-level people that you have a solid relationship with, and just ask them, “What’s going on?” Just say, “Hey, what’s the deal here?” Get some of their feedback; gather information from them. They’re going to be able to give you the real story, or they’ll be able to share with you as much as they know. Again, these internal champions, these are the folks that are onboard with your solution. They believe in your value. We’ve got to get their feedback and figure out what’s really going on.
Now, once you figure out what’s going on—I’m guessing this decision probably happened at a higher level within the organization—so you need to meet with the people that made the decision to switch on you after they gave you a verbal commitment. And when you meet with those people, I would meet with them, once again, get in front of them, invoke a little empathy from them. And when we say, “invoke a little empathy,” remember your customer that you’re selling to, they also have customers. And there’s a good chance that they’re not only selling to certain customers, but they’re selling to their customers’ competitors as well. They’ve probably been in this same situation.
For example, let’s say you’re selling to a quarry. Jason, I know you’re—. I think this is an example of selling explosives in a quarry. Well, that quarry is selling that building material to a couple of different companies. Let’s say they’re selling that rock that they crush to Home Depot, and they’re also selling it to Lowe’s. Think about that for a moment, and talk to the customer and be like, “Look, I know this is a situation that you run into yourself. You’re oftentimes selling to two customers that compete with one another in your own industry. And think about how you manage that.” And all you’re doing here is you’re invoking a little bit of empathy from that customer and letting them know, “Hey, you guys go through this too.” And I think what you’re going to notice when you do that is they’ll start to see it from your point of view as well.
Now, the final tip here, we’ve got to be transparent with the customer, and the customer has to be transparent with us. That means we directly ask the customer what is going on. In this case, Jason, you had a verbal confirmation where they said, “Yeah, we want you guys to do the work.” And when you guys showed up, they already had a completed by your competitor. That’s, kind of a Bush League move. It really is. I would talk to that customer and say, “Hey, what happened here? What’s really going on?” And when they tell you, “You’re working with our competition and we don’t like that,” ask them further. Say, “Okay, what do you see as the great concern here? What are your biggest concerns?” And then you address those concerns. And maybe they’ll tell you, “Well, we’re concerned about you sharing proprietary information about our operations with that competitor.” And then you can say, “Okay, well, let’s put together an NDA, a non-disclosure agreement, that will protect you and give you some peace of mind.” And then remind them also that you’re building a partnership that’s based on trust and that they can trust you It’s going to be simple.
I remember, I was selling in the construction industry, and I remember, one of the customers I was interacting with, one of their biggest concerns was that we sold our product to them, and we also sold it to the end-user, their customers, which, basically, they started to view us as a competitor. They viewed us as a competitor, and we had to spend some time addressing that concern. And we explained the differences in how their core business was fundamentally different than many of our customers that we go direct to. So we had to address that head-on, and I would encourage you to do the same thing. Just directly ask the customer, “Hey, what is the problem here?” And then get to that root cause and then focus on addressing that root-cause concern.
Make it a big day.