From the perspective of the buyer, competitive pressures among vendors and the rise of the internet positions many products and services as commodities.



What does this mean and why is it important to sellers?

1. The amount of vendor and product information on the internet allows for in depth comparative analysis of features, benefits, and vendors before a meeting with a salesperson is necessary

2. Features, benefits and vendors are starting to look the same to buyers, so that leaves price as the only real differentiator in the buyer's mind

3. This places downward pressure on profit margins as buyers beat up the salesperson on price or the transactional salesperson believes the only competitive advantage is price

Now here is where things get interesting.

I ask Sales Mangers and Sales Professionals "When you're in a competitive situation and it's down to you and two other vendors, what percentage of deals do you win?" The answer is usually somewhere around 33 percent or one in three. That means the Sales Representatives of the competing vendors are taking turns winning in competitive situations.

These numbers hold up when the vendors in the geographic market are all selling using transactional selling tactics. I need to point out here that when price is the only real differentiator the buyers are not loyal to any one vendor.

Consultative, strategic, and collaborative selling gained popularity through a few key landmark books that studied how elite high-performance Sales Professionals sell.

These sales tactics promoted the idea that vendors could differentiate themselves from competitors by transitioning their Sales Professionals away from transactional selling to value or solution selling. Meaning the Sales Professional repositioned themselves as a trusted or strategic advisor.

From a skill perspective Sales Professionals don't discuss their products or services (solutions) before having a discussion about the prospects business objectives, obstacles, solution performance requirements, and success metrics no matter how much experience they have in the industry.

Due to increased competition, these selling tactics became sales strategies that the vendors' Executives and Sales Mangers implemented to address several high priority business issues:

1. How do we increase our win rates in competitive situations?

2. How do we preserve margins?

3. How do we reduce customer/client churn?

4. How do we increase customer/client loyalty?

5. How do we increase deal size?

6. What does our market value?

7. How do we increase market share?

8. How do we reduce the cost of sales

Lets go back to the situation I described above where all the competing vendor's sales tactics are transactional. Once one of the vendors starts repositioning themselves as a trusted advisor their:

1. Win rates in competitive situations dramatically increase

2. They charge a premium for their products and services - profit margins go up

3. Clients and prospects view the vendor as a valuable resource/partner - customer loyalty goes up and churn goes down

4. Deal size increase due to selling full solutions

5. Market share increase

6. Cost of sales go down

This is a very long way of getting to the point that the era of selling products using tactics that assume an understanding of the prospects business without going through a questioning process that focuses on the prospect's business first, is rapidly coming to an end.

For the Salesperson who's sales tactics are transactional, that find themselves competing against high-performance Sales Professionals who's sales tactics focus is on asking questions and becoming a trusted advisor, the competitive future is not bright.

It won't matter how many times the transactional Sales Representatives calls, leaves voice mail messages, sends letters, faxes, emails or meets with the prospect in an attempt to keep their name in front of them.

In a head-to-head competition a well trained Trusted Advisor will win almost every time. In fact, transactional behaviors will only magnify the differentiation and value of the trusted advisor and the vendor they represent. This is about competing and winning.