If you are in a business where the current supplier is not a problem, where the buyer does not buy the product or service on a regular basis, then this will not affect you. You can use the benefit selling method, or you can get great results using the consulting method; but if you are in a business where someone has to lose for you to win, then you know what I am talking about. You need to focus on getting rid of the current supplier in order to get the revenue. If you can’t get rid of them, you have nothing. If you don’t have a specific strategy to get between the customer and the current supplier, then you will not get the real customers.
To win in the real world, a world of buyers and sellers, and existing suppliers, you must be good at not only building relationships but also breaking them. You need to know how to defeat your competitors. In the case of competing for market share with other sellers, you face the same challenge. To win, your opponent must lose. In other words, you must figure out how to make your competitors fail.
WINNING STRATEGY
Chapter 1: The Wedge Strategy
Selling is like flying a plane. If you can’t land it, it doesn’t matter. The problem is how do you get the wheels on the track safely so you can get paid. If you can’t win a sale, what’s the point? Few salespeople are willing to sacrifice for prospects or customers. What they’re fighting for is winning. I’m not suggesting that your life is in danger. But if you’re going to invest the time in meeting potential customers, why not create a strategy that maximizes your chances of winning?
Even though I spent the first 5,000 hours coaching and learning about salespeople, I still wondered: What makes them fail, what prevents them from landing safely and getting what they paid for?
In most cases, the problem is that someone else already has the customer. While you are trying to figure out how to attract potential customers to your product or service, the current supplier, who has the first-mover advantage, is waiting, ready to use aggressive tactics and strategies to protect the customer relationship they have had for a long time. Their goal is to get you out of the air before you can land by swooping in to get the final information, adjusting their prices to match your organization’s pricing policies, and then ultimately retaining the customer. In sales, this is called “getting screwed.”
The second big problem is that you don’t differentiate yourself enough for your potential customers to perceive your superiority over their current provider. Your ability to “fly” is the same as your ability to differentiate. The higher you fly, the safer you are. When you don’t create a clear point of differentiation, it’s like flying at 100 feet to avoid waterfalls and small hills. You’ll never reach the altitude you want, and you’ll crash.
These two issues – one is the relationship between your competitors and your customers, and the other is the lack of differentiation – are the reasons why you fail.
STOP SELLING PRODUCTS AND START WINNING AGAINST COMPETITORS
Many salespeople try to show off their talents through the way they tell stories, deliver polished presentations, and find countless other ways to impress customers. Often, all of their impressions and strengths are in themselves. They are masters of the art of selling.
Winning is about understanding that there are three parties in a sale – you, the prospect, and your competition, not just you and the prospect. Your job is to gain a competitive advantage by differentiating yourself so that your prospect realizes that they are not getting the best service and products, without saying bad things about your competition. Your job is to show your prospect that what they need and want is within your power without having to sell directly to them.
Many salespeople work hard to set up meetings, make sales calls, and hope that one successful call will pay off. Try to meet as many people as possible, then you can sit back and rely on the law of averages. It is possible to predict that a certain percentage of the people you meet will choose your services.
It’s like the state of a slot machine player. As you pull the lever over and over again, you can hope to win enough to reinvest in the next round, at least for a while. The problem is that playing a numbers game in sales is like gambling on numbers. In the long run, you’ll probably end up with empty pockets, or even a lucky break on a few occasions. Psychologists call this “positive randomness bias.” In sales, it’s like prescribing yourself a prescription for very low returns or, worse, no returns at all. If you really want to make a big profit, you need a new strategy—one that doesn’t rely on chance, spins, or hope. You need a strategy that allows you to stop selling and start taking the lead.
A FEW WORDS ABOUT SALES HISTORY
Back in the days of agriculture, when professional salesmen traveled from town to town selling goods from horse-drawn wagons, none of us would have thought of sales as a science. Then the industrial revolution happened. Factories sprang up. Railroads connected shopping centers. Capital contributions rose. As a result, factory owners began to set up sales teams to maximize sales of their mass-produced goods. Sales became an increasingly important profession. Because the workforce depended on sales to feed their families, salesmen were increasingly relied upon as the mobile agents who set the Macormick reapers and Gillette razors in motion. If salesmen failed to do that job, they could make life difficult for dozens of people, not just themselves.
In the early 20th century, salespeople were pretty well trained as the engine that drives sales. At the same time, thanks to Sigmund Freud, Carl Jung, and others, psychology was seen as a window into the human mind. With this, many business leaders thought, “Well, maybe there’s something we can do to improve the sales process.”
First, think about the selling benefit. Start with the seller, turn the seller into a product and service deliverer. The goal is to focus on improving the seller’s communication skills, using psychology to explore the buyer’s mindset. Quote a feature, then mention the benefit. In other words: this is how it works. And this is how people do it. This is how it works for you, too. And then move on to the final test – testing their desire to buy.
The ultimate salesman who can sell anything to anyone is an illusory goal. Moreover, even if the science of business could teach them a few things to sell hatches to submarine manufacturers, the sales profession would lose sight of its most important survival factor: customer satisfaction. To solve this problem, sales consultants have developed a model called consultative selling. It starts with the buyer and how to satisfy his or her needs. The goal is to help the consumer get what he or she wants. A consultative salesperson understands the customer. He or she can help the buyer make the right decision. He or she is both an advocate and a partner. While the selling benefit characteristic involves trying to persuade the buyer directly and publicly, the consultative selling approach is aimed at creating a close relationship with the buyer and then leveraging that relationship.
Consultative selling is still the most popular method today. It is the best way to sell—except when it doesn’t work. Often it doesn’t work when it should. Why? The problem is that it relies on a perfect model of two people: a buyer and a seller.
In reality, there is often a third party, the current supplier. In most cases, the current supplier has the upper hand. They will use their existing relationship to keep the customer coming back, and tell the potential customer that they can match your price, service, and product. They will steal all your ideas and hard work. When this happens, you have been screwed. You have lost.
If you are in a business where the current supplier is not a problem, where the buyer does not buy the product or service on a regular basis, then this will not affect you. You can use the benefit selling method, or you can get great results using the consulting method; but if you are in a business where someone has to lose for you to win, then you know what I am talking about. You need to focus on getting rid of the current supplier in order to get the revenue. If you can’t get rid of them, you have nothing. If you don’t have a specific strategy to get between the customer and the current supplier, then you will not get the real customers.
To win in the real world, a world of buyers and sellers, and existing suppliers, you must be good at not only building relationships but also breaking them. You need to know how to defeat your competitors. In the case of competing for market share with other sellers, you face the same challenge. To win, your opponent must lose. In other words, you must figure out how to make your competitors fail.
IS YOUR GOAL TO SELL OR TO WIN THE COMPETITOR?
In 1986, Italian economist Vilfredo Pareto discovered what is now known as the 80/20 rule. Pareto showed that in any given society, approximately 20 % of the population will own 80% of the society’s wealth. This is why in a typical sales team, 20% of the most aggressive salespeople will generate 80% of the total revenue. Pareto discussed this issue, and now we know why there is an imbalance in sales revenue. The reason is because there are two types of salespeople: those who wait for an opportunity to show off, and those who try to apply every tactic in every sales call to achieve a winning position.
Let me ask you this question. What is the most important part of a car? The engine? The brakes? The keys? The steering wheel? Hardly any of them. The most important part of a car is the rest of it. Without them, the car cannot move, or at least cannot move safely. So what is the most important part of selling? Again, it is the rest of it; and, in most cases, it is the part that makes your competitors lose.
Presenting features and benefits to your customers is a great but incomplete method. It’s always a valuable and admirable thing to do, but too often it’s not. Maybe you’ve never done it before, you listen carefully to your customers, develop a proposal based on their needs, and present it effectively. It solves all the problems your customers have, and you’re offering a very competitive price, but then you find out that the current provider is still holding your business. You kick yourself and ask yourself: What happened? You know what happened. The incumbent is playing you. They’ll play the same strategy as you, and they’ll win and you’ll lose. Yes, you need to build a relationship. But you know it, and you do it. What many salespeople fail to do is to learn about the relationship between their prospects and their current salespeople. That’s the essential part. There is no more effective strategy (except the Wedge) than to make a prospect view their current salesperson in a negative light. That’s one of the reasons 80% of salespeople only bring in 20% of revenue.
Before you put this book on the shelf and decide that The Wedge is a negative rule and an unethical sales method, answer this question for me: do you own a home? Is it insured? Have you ever made a major purchase? That’s why I’m asking. When the insurance agent visits your home about 30 days before you draft a risk analysis, outlines all the potential losses you could face, shows you all the things your policy will cover and all the things it won’t cover, so you don’t have to worry about making a claim, are you satisfied with the insurance agent’s process? Unless you have a very prominent insurance agent, you will not see an insurance representative for years or even ever. Maybe you don’t care that things went that way. Maybe you can afford to take care of yourself in case of theft or natural disaster, and you don’t care whether your insurance company will cover what you lost.
Let me go into this a little more and ask you something. How many phone calls do you get every day from someone who wants to send you a home insurance quote? How do you respond? You probably say “no, I’m happy!” What does that mean to you right now? If you had a way to let your customers know that they are not being served well by their current provider without saying a word, and let them know how great your service is without having to be a sales pitch, wouldn’t you agree that it would save us a lot of time in winning business?
In short, what traditional sales methods lack is a focus on how to make your competitors fail without talking about them.
REALITY CHECK
Let’s assume that we’re going to go in with a winning strategy. You’re going to help your customers realize what your competitors can’t offer them that you can. You’re going to use that to get between them and your competitors. In a perfect world, this would work. Unfortunately, that’s not the world we live in.
As a salesperson, you probably have a high percentage of repeat customers. How many times have your customers asked you, “Can you do this?” In one industry I worked in, commercial real estate and casualty insurance, sales reps reported a whopping 92% of their current customers being repeat customers. Is that a godsend to the insurance industry? No, it’s because they have a personal relationship with each customer, and they can get the big picture. How many times a day do you leverage your customer relationship to dig for information and get the big picture? You do it almost all the time.
In football, if you’re a midfielder, you know that one way to get five yards is to signal and let the defence run up the right wing. If you’re a defender, you do the opposite. You leave your sweet spot, try your best to make the attack move perfectly, and if you do that, you’ve got five yards of space on the pitch to play with.
When you are an existing supplier and your goal is to retain your customers, you operate under the same five criteria from the rules that you would use if you were a seller trying to acquire new customers. For example, have you ever been to Louisiana? If so, you know that people there love to fish and hunt. How can you establish a relationship there? You just go hunting with your best friend. A few beers and a few fish and you can have a pretty good relationship. Why is this important? It should be pretty obvious. When someone wants to take your customer, you just remind them of the fun time you had hunting. You tell them that if they give you a chance, you can definitely adjust a few things about the price and improve the service. When you make a promise and deliver on it, who gets the customer?
So there are certain rules of the game that you must use to maintain your advantage with your customers. Now, let's reverse the problem. When you are negotiating with a new customer, is the customer's current supplier trying to do the same thing as you? This is a fact of sales that you have to do every day. You can't deny it. You can't be naive enough to ignore it. To win, you have to accept it, and act on it, and when you face it, you are faced with two other realities.
WHY POTENTIAL CUSTOMERS LIE
In my early days as a business consultant and trainer, I was a bit of a naïve person and at that time I was working with three different insurance reps in Dallas. I spent some time with one rep discussing how to secure a particular account. Later, when I spoke with the second rep, I realized that this one was targeting the same client as the first. The third rep, you guessed it, was the one who had the account.
After a month of watching both agents pursue the client, I realized that the incumbent agent had kept the client. So I discussed it with the first agent, asked him what happened, and he said, “We lost because of price.” Then I went to the second agent, asked the same question, and they said the same. They also said they lost because of price.
So I went to see a friend who worked at my current supplier and mentioned that I had heard that our company had won the contract, while the other two companies had lost out because of price competition. He asked me, “Who told you that? Do you want to know the truth?”
I replied, “Yes. What happened?”
And he told me that the two competitor quotes were actually much lower than his. He said that he took the person who signed the policy out to lunch (and bought two bottles of wine) to convince him to lower the price so that the client would stay with the company. So the client had lied to the two insurance reps. I walked out of the meeting thinking, “It’s amazing what a potential client says to a loser that can save him from such a bad situation.”
The more I thought about it, the more I understood what it meant. It was one of those great moments that made me start asking more questions to get to the core of what makes up the art of selling. The customer had lied to the sales representative, and this was another illustration of the power of the current supplier. These customers were actually lying harmlessly because they were so attached to their current supplier, and they had no intention of changing suppliers. But that doesn’t mean they were bad people. It’s human nature. By showing a special interest in your offer, they could get a free lesson. If you can talk to them and make them happy with the products you offer, why wouldn’t they take advantage of your kindness? They could use you to learn more about what’s going on in the market. You are a rich source of information and resources that can help your company, a source of creative information and the best analysis of the present. Your prospect is probably a good person. They don’t want to hurt your feelings, so they give you the opportunity to present and sell. They may even let you buy them lunch. They want you to think well of their company. When you finish your presentation, they shake your hand, promise to stay in touch, wish you well, and then shred your business card in the trash as you walk out the door.
LOSE BECAUSE THE PLAN IS TOO PERFECT
Every now and then you come across a perfect client. With a snap of your fingers, the prospect asks for business. You meet exactly what they want. The service is right. The price is right. The attitude is good. Everything seems perfect. So, have you got the client? Not yet. Why? Because no one has said anything to the person who has the client. You can’t expect the client to fix it for you. The client doesn’t want to call Phil and say, “Hey Phil, I’m calling to let you know it’s all over. Have a good day.”
In fact, Phil will learn about the proposal you sent to the client. Unless the client learns that Phil sold inside information about the client's company to a competitor that morning, he will have complete confidence in Phil that your plan has been thoroughly vetted. That is a signal to Phil to pay attention. He will then take action, taking advantage of his position as the incumbent supplier. He will get a complete picture of the problem, adjust his plan to meet your needs, and keep the client. He will do everything he can to make the client happy. He will relieve the client of the idea that he had to eliminate a competitor to get the desired result.
Never underestimate your current supplier. They have relationships, and you don’t. Your customers, like everyone else, feel more comfortable in a friendly, stable environment. When you are the one encouraging change, you are inviting uncertainty.
THE POWER OF CONTEMPORARY SUPPLIERS
On the second day of a sales conference I attended, a successful sales executive raised his hand and said, “Randy, I just had an epiphany.” He continued, “All my life, I’ve been taught to sell myself, to sell myself. I think I’ve taken a step back. Before I can start selling, I have to first eliminate the current supplier from the market. When they’re no longer in the shadow of the person with the crown, then I can start selling.”
That’s the bottom line. Only one person can wear the crown. To sell yourself and make a profit, you have to push the current supplier out of business and take the seat. The position of the current supplier is so powerful that it acts like the laws of physics. What would Isaac Newton do with these discoveries? If he were at the next business meeting, I’m sure he would bring these three lessons:
NO TWO SUBJECTS CAN EXIST IN THE SAME SPACE AT THE SAME TIME.
The higher the profit, the more likely it is that someone else has it. For example, if you are a banker, or a CFO, or a Big 5 consultant, if you are going after a big client, your competitors will be after it too. They may be in the crown. In this case, since you cannot occupy the top spot at the same time, you have to push them out of the top spot to take their place.
EVERY ACTION BRINGS UP AN OPPOSITE AND BALANCED REACTION
When I first got into sales, I remember being so eager to prove myself. I wanted to do something. When I first started out, I was competitive, like I was playing football or basketball. I was attacking my opponent. The problem was that the customer would get defensive, and I would probably get kicked out. If you want to make people defensive, just mention the negative aspects of their decisions.
When I realized that such battles were useless, I began to work as if there were no competition. Perhaps you are like me, thinking of sales as a single sport. I thought, “Sell yourself, and everything will fall into place. If I work hard, I will get the deal.” My boss said, “Sales is about relationships. Build them. Get the customer to like you. Then make an offer. They can’t make a decision without an offer. If it fails, try again. Next year. If you don’t get a deal in a while, it’s probably the wrong customer.” This thinking still affects many salespeople. It makes them feel bad about staying in a relationship that is going nowhere. It prevents them from thinking differently and adopting a new approach.
The truth is, we will always have competition. It’s time to stop acting like we don’t. In this book, you’ll learn how to face that reality, take back control of your business, and create easier opportunities to win.
AN OBJECT AT STATION WILL STAND AT STATION
As I have mentioned before, many people today have lower standards than they expect when it comes to what they get, whether it is a meal or even the attitude of the staff when they go to the supermarket. The same is true of the relationship between a potential customer and an existing supplier. If things are generally good, the customer is relatively satisfied. The customer accepts things as they are. And the same is true of relationships, like static objects that tend to stay the same.
The question is: How do you make your potential customers unhappy? They have a lot of latent dissatisfactions. But how do you make them confront those dissatisfactions and find a way to resolve them? How do you make them see that they are not getting the best service, and motivate them to take action? Customer dissatisfactions are peripheral motivators that you can use to stir up the quiet inside, and grab their attention.
You can intervene in all those twists and turns not only when you have captured your customer, but also when you are competing to attract a potential customer.
THE PAIN
Humans avoid pain. I learned this early, growing up on a farm outside Lubbock, Texas. Like many of my neighbors, my family raised cows. We had a black Angus cow named Susie. She was a sweet old cow, but she was hard to keep in. So my dad installed an electric fence without my knowledge. One day I went out to tend to the cows, and as usual I crawled over the barbed wire and, “Ouch!” A jolt of electricity nearly knocked me out. I told myself that I would never let that happen again. Pain is a great motivator.
We have learned from behavioral research that approximately 65 to 70 percent of people are motivated by avoiding pain, while 30 to 35 percent are motivated by seeking pleasure. If you have been in sales for more than a week, this concept should be fairly easy for you to understand. The biggest challenge is to make the idea of seeking pain a reality. It is one of the biggest problems we as salespeople have. Because all of our customers do not have high expectations, they are satisfied, or at least satisfied. We are responsible for this. Think about your car, your house, your children, your spouse, your job, your commute, your boss, your clothes, and a host of other things. Are you satisfied with everything because you have lowered your expectations to what they should be? Here’s the secret to not feeling pain. In fact, those are the same things your prospects want. That’s why it’s so hard to fully understand your prospects’ desires, frustrations, and pain points when you’re in a sales meeting.
Here's another illustration. Like you, I do sales calls. Many prospects never think about the costs involved in getting estimates done. To them, it's all part of the total cost. My approach is different. It's a cost we have to recover. Many large companies have separate staff who do the estimating, write the plans, review, edit, reconcile, and deliver. Putting all the projects together is a huge expense, but many people think it's just part of the cost of doing business. In other words, they're lowering their expectations below what they deserve. They're accepting waste. And many are accepting low turnover, high operating costs, and low profits. What do I mean? Finding those pain points is difficult because your customers have tucked them away somewhere and see them as something to discuss in the future, not now.
So here’s a valuable question: How do you make your customers feel dissatisfied, frustrated, annoyed, concerned, worried, anxious, uneasy, or any other negative emotional state they might be experiencing when working with their current service provider? More importantly, how do you make them blame their dissatisfaction, annoyance, frustration, and discomfort on their current provider. If you can get in on that pain, you can leverage that emotion into external power that can defeat the current provider’s existing advantages. Making your prospects feel those pains is essential to winning. Why? Because if they don’t recognize a problem, they don’t need a solution, and you have nothing to offer them.
One of the biggest concerns of buyers is a lack of understanding of what might affect their future. Consider your own situation. Take the tax code, for example. On one hand, you might worry that you’re overpaying. On the other hand, if you’re aggressive, you might be afraid of hurting your internal revenue audit. Why not take control of your future? Since the tax code is so complex, who knows what’s going to happen? Our lives are full of uncertainties and uncontrollable things. What will your house and car be worth in five years? Did you choose the right job? Will your product exist? Will you get cancer? Your customers are in a similar situation. They think about the future, and they realize that there are countless things they can’t predict. Our job as salespeople is to help them control the controllable things, reduce the anxiety they feel, and make their future more predictable.
Customer pain points are like Newton’s external forces that you can use to break the seemingly impossible connections between your customers and your current suppliers, allowing you to gain superior benefits over your competitors. Customer pain points create opportunities for you to use the Wedge strategy to eliminate your current competitors.
THE KEY THINGS
What have we learned?
* Most sales opportunities involve three parties: the buyer, the seller, and the seller's competitors. The third party is a crucial one that traditional sales methods often overlook.
* By focusing on the relationship between customers and competitors, you can win in the marketplace instead of just focusing on selling products.
* Just as you protect your customers from competitors, your customers' incumbent suppliers are also looking for ways to prevent you from winning their customers.
* No two entities can coexist in the same space at any given time. You have to knock the current provider out of their position before you can enter.
* Every action has an opposite and equal reaction. If you tend to attack your opponent, your customer will become more defensive and closed off.
* An object at rest tends to remain at rest. Most customer-supplier relationships are static relationships, because customers have actually lowered their expectations to what they are getting.
* Customer grievances related to their current supplier are external factors that you can exploit to disrupt the relationship between the customer and their supplier, giving you the opportunity to outmaneuver your competitors and win. This allows you to use the Wedge strategy to defeat your competitors.
Competitive analysis has truly transformed the way you sell. The next chapter will show you how The Wedge can dramatically influence your launch strategy and how winning positions can be predicted. We’ll look at how to differentiate yourself from your competitors, build your strengths around their weaknesses, and discover your true competitive advantages. Once you do this, you can step into your customers’ pain points and help them discover why they should do business with you.
As we move on, let me ask this question: Why should a customer hire you and not your competitor? What exactly makes you better?
