#21: Competition

Now that we have finished looking at propositioning people and businesses and you have a clear idea of how to portray yourself, properly, within your professional area, we must move on to tackling the issues associated with these propositions. More specifically, the things that could block you working with others: competition.

My definition of competition is anyone or anything that prevents you from winning business; I think there are six categories.

1. People you go head to head with, where it is a straight fight on service or product quality and price.

2. People out there who could be confused with you. Because if you can be confused with somebody else, either by the way they describe themselves or by what they are called, then that confusion could be sufficient in the potential buyer’s mind to increase the risk they don’t buy from you.

An example for my world: if I am at a networking event and do a particularly bad job of articulating what I do, I can guarantee you that somebody will assume that I am a coach. I am not a coach, I have no coaching qualifications, and I would never portray myself as a coach. But the very fact that people might mistake me for a coach can be a problem, as I have to explain why I am not a coach and what I actually am and do. I have to get back to zero before I can start selling. That is what I mean by being clear about who you are and what you do.

3. “Closet competition” which is people who do what you do, and operate in your geographic patch, but win all of their business from word of mouth referrals; they do not have a website, and operate “off the radar” but they could be taking business you could otherwise win. Competition is therefore not just what you can see around you.

4. Overlap. This is people who do partly what you do, but the overlap is sufficient for them to be competition. An example from my world is the accountancy profession:

Over the years we have had many conversations with accountants and tried to build strategic relationships with them.

We have said, “Look, you have clients with a whole range of needs, one of which is finance; if we teamed up, you could do the finance aspects and we could deliver some of the other aspects.” I spent some time working with a consultancy that was very strong horizontally – we had consultants who were strong on marketing, sales, human resources, operations, IT, finance, and so on – anything you would expect to see on the board of a company we had people who could do that. Most consultancies go deep the other way, i.e. they will be experts at marketing, sales, finance, human resources, logistics, IT, etc.

We used to promote the “virtual board concept”, i.e. if an entire board got wiped out in a plane crash we could put a complete set of replacements in and run the business. A very powerful message. The accountancy profession tended to look at us and conclude that we were competition, as we had finance people. We would counter that, we were happy to do everything else, apart from the finance, but most accountants remained reluctant to work with us and as a result a potentially lucrative route to market was largely closed to us.

5. Internal. This is particularly important if you are trying to get into the consultancy or contract space in IT or HR, as these are two disciplines where companies can move between choosing to outsource or bringing the work in house. Depending on where a company is on its cycle, you can either get business or lose business.

6. Inertia. The potential client chooses to do nothing. I can only think of a couple of recent examples where I have pitched for business and not won it. I can however think of many examples where people have decided to do nothing and just take their chances. Inertia is a huge, huge challenge. If the prospective client decides to do nothing, then in my book it’s competition because it stops you getting business. How do you deal with client inertia? You will all face it, whether you are selling a product or a service. You need to have a disciplined diary system so that you can follow-up effectively on anything when the answer from the prospect is “yes, but not now”.

Next month we will look at researching potential clients and the market you are working in to see where you stand, and how your business differs from others, your competition, in the same area.