4 Reasons Your Real Competitor is the Status Quo
Today’s salesperson overthinks his competition.
Instead of concentrating on the needs of the prospect, many salespeople obsess about the competition, forgetting the real value he or she brings to the prospect.
When I speak at conferences or engage with clients I always ask, “Who’s your competition?”
They automatically rattle off company names or products.
But that’s not the competition. Status quo is their true competition.
By doing nothing and sticking with status quo, most prospects take the easy way out of a purchase. Oddly, they’ll do this despite being dissatisfied with their current solution.
Sales Benchmark Index tells us that nearly 60 percent of all qualified sales pipeline opportunities end up in “no-decision.” Status quo, again.
When I do win-loss reviews with clients, I find these numbers quite accurate. You didn’t win and neither did your direct competitor. The prospect stayed with the status quo.
In doing sales funnel evaluations, only half of forecasted deals are won on average with a good portion remaining in status quo. Even with the detailed benefit of buyer personas, I still hear prospects say, “Sometimes it just doesn’t make sense to change, I can live with the current pain.”
The data is that the majority of your prospects are still trying to decide whether or not they are willing to make a change, not whether they want you or one of your direct competitors.
The data clearly tell us that prospects are in the midst of deciding whether to change, not whether to do business with you or your competitor.
Your most important job in sales is to help your prospects understand their current situation and the problems they face. You must sell the problem first, then make the status quo uncomfortable for them.
Behavioral scientists call this the status quo bias. Status quo bias is an emotional bias, a preference for the current state of affairs.
The current baseline (or status quo) is taken as a reference point, and any change from that baseline is perceived as a loss.
You need to identify and prepare for four main barriers to moving past status quo:
- Time Scarcity: Your prospect feels overwhelmed with information; her time has become a precious commodity. Your self-promoting value proposition needs to be replaced with more provocative, edgier challenges to your prospect’s current assumption. Deliver the challenges in a way to help your prospect realize the danger in staying with status quo.
- Risk/Loss Aversion: Neuroscience has proven the more powerful motivator to change is the ability to avoid risk or prevent loss. While you’re determined to prove the benefits of your offer, your prospect wants only to avoid risk or loss. To move her away from status quo, you must appeal to the risk or loss of not Your conversation should move her to a place where she feels status quo is no longer safe.
- Reluctance to Change: Your prospects continually ask themselves if the pain of change is worse than the pain of staying with their current problems. If your solution is more painful to them, they will stick with status quo. Worse yet, if they don’t feel any pain, then they can’t see your solution. Be sure your messages and conversations enable your prospect to see a clear and easy path from unsafe to a new safe. Prospects only change when they want to fix, accomplish or avoid something.
- Incumbent Advantage: Assume your prospect wants to solve his problem today, and he thinks he can do it with his current provider, though not as effectively as you see it. He’s in his comfort zone. So you must demonstrate to him enough contrast between your new solution and his current solution. He has to come to believe he cannot achieve what you are offering. I’ve dedicated a full learning module in MERGE 2.0 to this common problem of dealing with the incumbent.
An amazing 74 percent of executive buyers give their business to the company that helps them establish their buying vision, cites a study by Forrester Research.
When you establish your prospect’s buying vision, do not lead with what you sell. Instead, devote your effort to your sales messages, conversations and sales process to lead to your prospect’s desired outcome. What matters is how you present challenges, threats, and risks associated with status quo, along with how you propose to solve them.
To understand what matters most, the Sales Executive Counsel conducted extensive research, analyzing tens of thousands of data points to determine ways to outperform the competition. The results were published by the Corporate Executive Board (CEB) in its book, The Challenger Sale.
The results did not surprise me.
As outlined in the chart below, fully 38 percent of customer loyalty attributes to brand, product and service. If you build a solid brand, produce a great product and deliver world-class service, you can win more than one-third of the time.
Most people I discuss this subject with expect the three areas to produce much higher results. Add price at 9 percent, and you can win 47 percent of the time.
The study did reveal that the remainder of customer loyalty─all 53 percent─attributes to your ability to outperform the competition in the sales experience itself. As authors Matthew Dixon and Brent Adamson write in The Challenger Sale:
“Over half of customer loyalty is a result not of what you sell, but how you sell. As important as it is to have great products, brand and service, it’s all for naught if your reps can’t execute out in the field.”
That execution depends on understanding the prospects’ needs and helping them create a vision for a solution, one they see as a better path than staying with the status quo.
The prospect might well tell you what they want. But have you gone to the next level and gained a deep understanding of what they want to fix, accomplish or avoid? What do they really, really want? You need to determine the logical and emotional payoffs, both for the organization and the individual decision makers.
We’ve said many times in previous blog posts, the prospect’s vision for a solution is his or her expectation of what you or your product will do for them. They look for results.
And they always relate to one or more of three basic areas:
- Discrepancy: A value gap exists, defined as where the prospect is today and where he want to be. Unless he’s aware of the gap between his current situation and his ideal solution, and unless he believes you can bridge the gap, no sale will take place.
- High Priority: In addressing the prospect’s vision for a solution, be alert to the level of importance he gives to solving the problem. If it is not high on the list, and he has not dedicated resources and budget to solving the problem, you won’t make the sale. It will end up in the status quo.
- Solves their Problem: If your prospect has a pressing issue, the discrepancy level by definition is going to be great. If you recommend a solution that mirrors his vision for a solution, the opportunity to make the sale is quite good. Sounds obvious enough. However, even if your prospect’s problem is not a high priority, you might still be able to sell to his vision by demonstrating your solution can help him avoid a problem in the future.
As a sales professional, you already have plenty to worry about in the high-energy climate of complex sales today. Let go of your fears about the competition. Focus on moving your prospect away from status quo and toward change he can live with. Your freshly closed sales will reward you.
See you on the upside,Bill
For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700