Developing a small opportunity with your client

- [Instructor] Developing a small opportunity. Sometimes, the way to begin a competitive displacement is to identify and pursue a small opportunity that shifts your status from salesperson to partner and shifts your company from one that is calling on your client to one that is already serving them and providing them with an invoice. This changes your status and gives you greater access to the people you need to create a displacement. You know how difficult it can be to remove a deeply entrenched strategic partner, even when they are struggling and even when they're complacent. If you're being honest, you know some of your clients are exposed to being poached by your competitors, but they stay with you just to avoid the switching costs. It being too time consuming to remove you and retrain a new partner. As much as I want you to take all of your competitors' business, there's a case for developing a small opportunity. The kind that gets you a foothold that you can expand over time. In the very first sales training I ever attended, the 50 of us attendees were all given a role play exercise in which we were to ask the client's regional manager for an order. The scenario included facts that made this an easy ask. As the client was struggling to have their orders filled by their current provider, they were falling behind on their work and they needed help with some rather difficult to fill orders. When I was called to the front of the room to do the role play with the regional manager, I asked for all of the business. I said, "Your current partner "is struggling to take care of you. "We have the ability to provide you "with the people you need. "I'd like to give you a contract "where we could be your primary provider." It was bold, audacious, and not what I had been instructed to do. But the reason I took this approach was because this is what my manager and I had been doing on a weekly basis, resulting in a tenfold increase in sales for our previously struggling branch. The regional manager pushed back. I pushed harder. She pushed again. I pushed back trying to win this battle of wills. She called for a break and pulled me aside and said, "I get what you were doing. "I know it is working for you, but it doesn't always work. "And sometimes the fastest way in is just to get an order, "so you have access." I was so wrapped around the axle trying to win the deal that I cut myself off from other possibilities. Later, the strategy she suggested helped me get orders, get access, and gain the trust to make a competitive displacement. In a real deal I was pursuing, I had been calling on a large retailer's distribution center. Their partners were the two largest companies in the United States. Neither of the partners was providing them with the results they needed and they were open to adding another firm. They weren't even considering replacing one of these partners because they believe that if the two largest providers were incapable, no one else could do a better job. I agreed to come on as a backup, simply filling the orders the other two firms left unfilled. That gave me access to the building and all the stakeholders. I started to show up daily on my way to my office to make sure we were producing results. That access allowed me to spend time with the stakeholders, developing relationships with all the people who have a say and who would be a partner. The second year, my company was a primary. The third year, we became the sole provider, using other agencies only when we needed to and always as part of our overall program. The key lesson here is that sometimes the right way to begin a displacement is with a single order. Some companies use operating models under which they retain multiple providers. A tried and true strategy is the Champion/Challenger model, where the client gives you, the challenger, some percentage of the business as a hedge against the champion. These companies find that they do well by having two providers competing for their business. One who gets the lion's share of the business, the champion, and another who gets enough to be considered the challenger. This approach is popular because it allows the company to shift a greater portion of their business to the challenger should the champion struggle, become complacent, or fail the client. I'm putting the strategy here for two reasons. First, if this is customary in your industry, you can win something less than a full competitive displacement and gain a new client. Eventually, if you are proactive enough and work on mindshare, you can become the champion and crowd out your competitor, leaving them with the smaller portion of the business. The second reason I include this strategy is because I have seen sales people successfully introduce it even in industries where it is not common. What differentiates the strategy from acquiring a small opportunity is that you ask for and gain a significant portion of the business. Instead of asking for a single order, you ask to pick up a percentage of the overall business, allowing the client to hedge against the current provider's possible failure. I want to make it clear here that this strategy requires careful consideration. You cannot use this strategy if you were doing so only because you don't want to do the work it takes to create a full competitive displacement. This decision makes the most sense when it is difficult for one supplier to meet all of the client's needs or when the client's risk requires them to use multiple suppliers. If they must use two firms and you would not be cutting yourself off from a potential full displacement, this is a viable strategy. Just don't use it because you believe it is easier. A funeral for a friend. It isn't easy to fire people with whom you've had long relationships. Your competitor has longstanding relationships with your dream client's company. They have a history of working together over time and they have produced results in the past. They also likely have personal friendships having spent time together and having dealt with issues and challenges together. Your competitor knows the client's business in a way that makes it easier for the client to communicate with them. Their history providing an understanding as to how things work. The decision to replace these longstanding partners with you comes with switching costs. First, your dream client has to teach you their business. Even if you work with similar companies and in the same vertical, you know that every client has their own idiosyncrasies. Second, they have their own culture, their own way of communicating, their own preferences. They also have their own internal politics, people attempting to influence the decision-making, including decisions about who their partners are in order to enhance their standing. Third, you are an unknown. You may or may not be able to produce the results you say you can. Others have tried and failed before you, and you sound a lot like those people. Many of whom struggled greatly because they didn't understand how to work with their company. Occasionally, you are lucky enough to come across a dream client that is so dissatisfied that they are ready and willing to remove their current partner. More often, however, they will extend that partner the same courtesy they would want from one of their clients should they struggle to give results, namely, a chance to make improvements. This makes competitive displacements a long game. It is one of professional-patient persistence. Make no mistake. It is difficult to fire people you have worked with for a long time, especially when you personally like them very much. You make this more difficult when you speak poorly of your competitor, which can cause your client to feel the need to defend them. Remember, they chose your competitor and at one point they did a good job. You must be careful about overplaying your hand when it comes to discussing your competitor's failings. In fact, it can be useful to give your client the rationale for letting them go by describing how much things have changed, how difficult the business is, how tough their business model is when it comes to producing the same result, and how you have a lot of respect for your competitor and the work they do. Someone has to do the difficult job of calling your competitor and letting them go. And you can make that easier by providing insights as to why they are not producing the result they need to without saying a bad word about them. Much of sales is made up of competitive displacements. The activity that begins that process is the creation of an opportunity, whether it be a small opportunity or a full displacement. Do this now. Number one, make a list of opportunities you are presently pursuing. Number two, write down their current state, the future state they need, and what they need to do to close the gap between the two. Number three, write down what you need to know to expand the delta, making the need to change more compelling and more valuable for your prospective client.