Why Compete in a Crowded Market?
Ever complain to yourself that there are too many advisors doing what you do?
Seems everyone goes after the same piece of business. Of course, markets are saturated, and we see competitors step on their collective toes all the time. Right?
Consider these facts: 434,800 insurance agents1 in the United States, expected to grow 15 percent by 2018. Add to this, more than 300,000 financial advisors2, many with retail brokerage firms. And what about the lawyers and accountants who float all around the advisory pool. CPAs alone add another 646,2503 “advisors” to the mix. And lawyers, well, that’s another 1.4 million.4
Okay. It’s a supercrowded space filled with others who do or can do what you do. So what?
It simply means there is a bona fide market (demand) for your services.
In my neighborhood, there are 32 Italian restaurants within 15 miles of my home. If number 33 opens, it will do well, too, assuming good food and atmosphere. Wherever there are plenty of buyers who want to eat and enjoy the experience, there’s always room for another lively trattoria.
Any savvy prospect will ask: “How do you differ from your competition”? In mature markets, it’s tough to explain how you stand out. You can’t bemoan competitors. You can’t spout the same ole’ message.
Besides, in crowded markets, like financial and professional services, buyers don’t rarely see differences among firms. If you’re in a large market, say, retirement planning, the challenge is even greater because buyers have become hyperaware and hypervigilent on costs. Sadly, firms are left to compete on price.
Instead, do your own quantitative and qualitative research on the buyer’s issues. Take control of the questioning process. Back up the statement: “We have conducted major research on companies in your industry, and can bring specific knowledge and value solutions on the issues you face. Let’s go through them now.”
The RAIN Group found in its 2009 research on How Clients Buy, 40 percent of 200 buyers of consulting and professional services encountered providers that did not understand their needs; and 32 percent said the provider failed to convince them of what value they could expect.
The Real Competitor
You aren’t competing with another product or service. You are up against the status quo provider or the prospect’s decision to handle the issue in-house. Understand their issues, and through your initial meetings, get them to recognize the value gap, quantify it, and share alternatives.
Convince the buyer of the value your product or service will bring, regardless of competition. Don’t ignore them. Identify and monitor them.
I urge you, do not lead with your product or service, like most competitors. Rather, lead the prospect to your product or service with constant focus on the value you bring to his or her firm.
At the moment it comes up in conversation, turn the focus away from competitors, and focus your lens squarely on your prospect. Then, you can prove your worth with your knowledge, capabilities and fill the prospect value gap.
Why compete in a crowded market? Because you can. And you must.
See you on the upside,
Study by Boston-based Cerulli Associates, as reported by Reuters2
Survey of Law Firms Economics3