When mediocre sales professionals consider why they lost a “perfect” deal, they ask: “Which competitor beat us?” and then satisfy themselves that they somehow got outplayed by some other organization. They’ll address this in future pitches by being more negative about competition and quicker to highlight “features & benefits” more enthusiastically; all the while never improving. Satisfaction with this kind of shallow understanding is, unfortunately, common. By contrast, great salespeople are able to consistently discover the prospect's range of Alternatives and then solve for those alternatives. In this article, we'll show you how to do just that.
Imagine yourself in a pitch meeting: the key decision makers are all present and have agreed that your offering is a great solution to their problem; that there’s ample budget and that an immediate kick-off suits both you and them. It’s perfect, right? Wrong.
Even when decision making, need, spend and timelines have been solved for, still a deal can slip through your hands if you haven’t dealt with Alternatives. When we say Alternatives we’re referencing a technical term from the STAND Qualification Framework. You can easily think of it as all the options a prospective client has if they don’t work with you. The nuance in this definition is important – alternatives is a bigger category than “competitors.”
Great salespeople who know this concept first try to discover the prospect’s range of alternatives and then work to solve for those alternatives. These salespeople find that prospects are more likely to be transparent about key information, more likely to follow-through on their commitments, and more likely to see the deal through to completion.
So how do you get better at navigating Alternatives? You can get a long way by following two steps…
Step 1: Discover The Prospect's Alternatives
Your first task is to identify the prospect’s alternatives, and make sense of them. In order to do that, imagine this from the prospect’s viewpoint – they have a business need, they have many options for solving that need. Among the options you and your solution are only one of many. To succeed, you need to map out what that set of options looks like and where you fit in on that map. You can focus your mapping on Alternatives of four types:
Direct Competitors: The most obvious alternative. These are peer organizations with similar products and similar price points which address the same basic need. (Example: Two private banks competing for the same high net worth client.)
Indirect Competitors: A less obvious, but common alternative. External organizations that don’t match your products or services directly, but draw upon the same budget pool, available time, or focus from the prospect. (Example: A proposal for compliance software being rejected because the year’s tech budget was spent on a big CRM integration.)
Internal Competitors: Resources internal to the client organization that can solve the problem you are trying to address. (Example: After receiving proposals from strategy advisors, a corporation decides to expand their internal strategy team and let them complete the work.)
Inaction: The most overlooked – but very common - alternative. The option to do nothing. (Example: After receiving service proposals a prospect goes quiet for a few weeks and responds to follow ups with “we’re just going to wait awhile.")
When you begin to look for these alternatives you will find they are all quite common, and may give you sufficient reason to disqualify an opportunity in the sales discovery stage. Like all disqualification this is good – it saves you time and hassle down the road and allows you to focus on your best opportunities.
Perhaps you’re thinking ‘this is all well and good, but understanding a prospect’s Alternatives usually requires a high level of candor from them. It’s much easier said than done.’ So how do you achieve that?
High-Yield Discovery Questions: Alternatives
The best way to discover Alternatives is to ask your prospect about them, and the way in which you ask can make all the difference. Try to be unbiased and curious in your tone and avoid seeking only the answers you want to hear, or responding positively or negatively to the answers based on how they benefit you. Channel the style of an investigative journalist – ask a range of questions to uncover hidden details about their alternatives and triangulate information provided by multiple sources.
Here are a few high-yield questions to get you started:
Is there a reason you’re specifically engaging us for this work?
This question establishes whether you have competitive advantages in-hand. It reveals aspects of the prospect’s priorities and motivations. For example look at two hypothetical answers to this question: “you’re the best-priced player in this sector” versus “I worked with your colleagues in France before.” These give very different premises for your position relative to alternatives.[i]
Why wouldn’t you handle this work internally?
The point of this question is to directly address the competition that comes from the prospect’s own organization, and which frequently gets overlooked by both parties in a sales process. A prospect’s own organization can be the stiffest competition for a sale – this question helps get that out into the sunlight for both parties to evaluate.
When this question is asked, it is important to recall our direction to ask dispassionately – allow a prospect to put forward the case for internal solutions without judgement.
Pro-tip: An effective discovery technique is to pose a question in the negative – i.e. against your own interests. This invites the prospect to switch roles with you, and advocate for your deal.
What would happen if you [put this on the backburner / don't address this issue within X timeframe / just wait and watch]?
This question manifests the true spirit of qualification. Even though you might not like the answer “nothing – we can just wait;” it’s better to hear it early in the sales cycle, not after months of meetings and proposal writing. This Alternative (inaction) is the silent deal killer and in our experience it is the least accounted for.
What alternatives do you have to support you on this work if we can’t?
This is nearly the exact same question as #3 but is rephrased as a leading question. Clients who appear guarded and try to dodge question #3 are more likely to respond when directly asked about the involvement of specific stakeholder(s).
Are there any other constraints – budgetary, manpower-related, other priorities or projects – that have to be resolved before we know this is going to move forward?
This question invites a prospect to talk openly about where they see alternatives. Notice that it does not contain the word “competitor.” This is because if the prospect raises indirect competition, their internal competition, etc. you will collect valuable intelligence.
Asked correctly, this question embeds the attitude that you want your prospect to be well-served. You have to be honest about this. I will sometimes add a sentence in front: “I’m going to make the case as best I can for working with us, but are there others who can support you on this work if we can’t?”
Bear in mind that not all of these questions need to be asked in the first meeting, and one single person may not even be aware of all of the timelines and boxes to be checked before they purchase your solution. Every situation is different, but it’s important that you’re prepared to ask these questions and to constantly aim to stay up-to-date by continuously challenging and refreshing the information you already have.
Your first job is to identify what alternatives the prospect has if they don't work with you.
Step 2: Solve For The Alternatives
Now that you have identified your prospect’s Alternatives, your second job is to solve for them. Here are three best practices:
Best Practice 1: Compete
Once you’ve completed basic discovery and established that you’re in competition for business, don’t be equivocal - compete. Be proud of your organization, your products, your prices and yourself. Embrace the idea of competition enthusiastically, and with the expressed desire to win. Let your prospect know you want to win. This clears the air. Like a good athlete, this shows that while you will respect their ultimate decision, you will do all ethical things in your power to win. This means a shift from dispassionate discovery into passionate advocacy.
This statement embodies the attitude: “You’re looking to compare and contrast your options – that’s great! I love describing what sets us apart from other alternatives…”
To misquote Shakespeare:
In [discovery] there's nothing so becomes a [salesperson]
As modest stillness and humility:
But when the blast of [competition] blows in our ears,
Then imitate the action of the tiger;
Stiffen the sinews, summon up the blood.[ii]
Best Practice 2: Differentiate
As a sales professional you can influence choice by helping prospects see differences that may not be readily apparent. Consider a training business trying to differentiate themselves:
“We provide follow up materials”
…is less compelling than:
“We provide each participant with the training notes for this course, a field book, lifetime access to our video library, and opt-in subscriptions to our bi-weekly tips.”
“We have a great compliance track record.”
…is less moving than:
“When the Delaware compliance scandal broke last summer, we were totally relaxed because it’s virtually impossible for that to happen with our service. Our compliance framework is rock solid.”
Enriching your stories with meaningful detail and anecdotes that capture your prospect's imagination will help you set yourself apart.
The particular point of differentiation that wins a deal may not be the one that seems most relevant, or that the last prospect thought was most compelling, so be thoughtful and observant as you look to appeal to the specific needs of the prospect you are dealing with.
Best Practice 3: Disqualify
It is not your job to sell at all costs. Those who read our work or study with us know that we teach the opposite – that you serve yourself and others best when you disqualify opportunities that are not suitable.
Misalignment on Alternatives can be fatal to a sales opportunity. As soon as you detect that possibility, address it up front.
One of my clients conducts 85% of their sales via open bid and tender. In their sector (Education Services) it’s common practice for prospects to have decided on a winning provider before the tender is even opened, and still to open the tender in order to create the legitimacy of an open competition. That client stopped submitting bids without first qualifying their prospects’ Alternatives, and started eliminating proposals that were only providing padding to a competitor’s shoo-in. Their win percentage went up immediately, and they were able to redirect their proposal-writing time and energy to bids with better odds.
Other situations which should lead you to disqualify an opportunity are: their preference to “do nothing;” their intention to rely on self-service; their preference for indirect competition that consumes their time and money; or an overwhelming bias for a direct competitor.
When you disqualify, let the prospect know directly. It provides a rare moment of business candour, and will set you in good stead for future opportunities. An example of dignified disqualification is:
“I can see that you have the capability, and the preference to provide these services internally, so I recommend that you do so, and that my company pass on this opportunity. I’m very interested to keep informed about how things progress for you, so please keep in touch.”
Bonus: How To Talk About Your Competitors
Competing is one of life’s great pleasures – it gets the energy stirring and raises the level of intensity. It makes for riveting business conversations in and out of the office. You will often be asked about your competitors – even in the process of courting prospects. When a client asks you about your competitors, the best reply is:
“I can’t speak on behalf of their business, but I can speak on behalf of mine – and I’m very confident to stack us up against anyone in the field.”
There is little to no value denigrating a competitor, and there is a lot at risk in overstepping your role as a sales professional. Resist the urge, and take the high road to the win.
So in summary – take time to understand the Alternatives that your prospects have at their disposal. Specifically look for direct competitors, indirect competitors, internal client alternatives and stasis. Once you are confident about the alternatives they have, either disqualify the opportunity or differentiate yourself and compete for the deal with intensity.
[i] The natural follow up question is to check whether their reason to engage you is unique to you, or the same for their alternatives. “Because you’re a fortune 1000 company” is less unique than “Because you were referred by my boss.” for example, and you’ll want to know where you stand.
[ii] William Shakespeare, Henry V, Act III Scene I
[iii] Rory Sutherland’s book Alchemy spells out the myriad ways in which we make false assumptions about what motivates a purchase. When you differentiate, take care to ensure it is in a way that matters to the prospect.