Understanding how your product/service differs from your competitors is crucial knowledge for a sales rep. An often overlooked but important source of competitive intelligence? Your customers.
A new study looks at the surprising effect of how customer-provided competitive intelligence can help or hurt your sales.
Why competitive intelligence helps salespeople close more deals
Competitive intelligence includes information about a competitor’s new products/services or features, their pricing and discounting policies, and their marketing and promotional activities. This competitive intelligence can be used as a tool by the salesperson to customize their messaging and better differentiate their products/services for a specific customer.
Because of their constant interactions with customers, the sales team is often the best resource within a company to gather competitive intelligence. But competitive intelligence shared by a customer is valuable only if the salesperson has the ability to effectively leverage the information provided.
Why some salespeople can leverage competitive intelligence – and some can’t
A study by Professor Hughes and colleagues examined the use of customer-provided competitive intelligence between 48 salespeople and 686 of their customers.
They found that salespeople are able to leverage the competitive intelligence shared by their customers to increase the perceived value and profit margin of their product/service, but only among salespeople who are highly adaptive. For salespeople who are low in adaptive selling skills, customers sharing competitive intelligence weakens their use of this information. Why might this be?
When a customer shares competitive intelligence, this may create an expectation on the salesperson to incorporate this information into the selling process, for example, by reassuring the customer of the product’s or service’s value proposition. An adaptive salesperson is able to effectively do so while an unadaptive salespeople may ignore the information or be ineffective at using it, which may end up making the competitor look better in the eyes of the customer.
Leveraging competitive intelligence isn’t just an empty catchphrase: the research shows that salespeople who are able to do so increase the perceived value of their product/service to their customers by advantageously differentiating it from their competitors, as well as their profit margins by avoiding discounting.
But the important insight from this research is that only salespeople who have the right adaptive selling skills can effectively use the competitive intelligence provided by their customers in order to close the deal.
How do you assess adaptability in your salespeople? Let me know in the comments or tweet at @ideal.
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