Do you know the warning sign that competitors are changing their positioning strategy to erode your market share? In this post we’re going to review one warning signal that can help with early identification that your competition is closing in on you.
HERE’S THE WARNING: Your Sales team is constantly asking for Pricing or indicating that they are losing deals as a result of price.
If this is currently an issue for your Sales team, it’s time to assess your sales team to identify the root of the issue. The issue, in our experience, will either lie in having inadequately armed your salesforce to deposition your competitors, or your competitors are actively attacking your position in the market. These are the questions you will need to answer in order to identify the source:
- Does Sales know how to effectively pitch the product?
- Are competitors being identified early or late in the sales cycle?
- Can your sales team effectively de-position / knock-out your competitors?
- Have your competitors started to mirror your positioning?
Here is a quick test you can run to understand how effective your Sales reps are at pitching your product. Ask 6-10 random salespeople two simple questions:
- What is your elevator pitch for our products?
- How do we compare in the market?
Odds are you’ll get completely different responses from your reps. Measure these responses for how far off the company messaging they are. If the responses are way off, it’s time to think of re-training your sales team or re-assessing your positioning strategy.
Sales teams will modify company messaging, adjust the positioning strategy and flip the benefits to the client to get the deal to go through. This is what we want! But you need to be aware of how far off the core messaging and value proposition they are going.
Questions about competitor pricing usually mean a competitor has been in the deal for long enough to get into the negotiation stage. It’s key to know when this competitor was identified:
- If the competitor has been in the deal through the entire cycle, Sales may be having trouble de-positioning the competitor
- If they showed up during the closing stage, there may be some unanswered questions from the prospect that left them searching for more.
- If they were blindsided and didn’t know, Sales needs some help with discovery.
When pricing becomes the key decision factor for sales, it’s a race to the bottom. You can expect discounting on contracts leading to lower average contract value (ACV).
Review the questions and requests for pricing from sales regularly and track changes over time. Find out the reasons for these questions, and use this as a way to track the effectiveness of your competitive content (battlecard, playbooks, competitor decks, etc.). Conclusions like “since we’ve updated our materials, we’ve been able to increase ACV and limit discounts by X%” are powerful ways to measure the effectiveness of your competitive intelligence program.
Pricing will always be a sought after data point and a powerful detail to help your team win. But, keep an eye on it, if it becomes the main reason for winning or losing deals you have entered the race to the bottom where no one wins.
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