Written by: LMiller | December 10, 2013
Disruptions: 3 Steps to Deal With New (and Crazy) Competitors
Originally published for RainToday.com
For a few years now, we’ve all read about those crazy competitors who come out with a new idea that wipes out larger, more established firms. According to a recent article in the Harvard Business Review, “Consulting on the Cusp,” this dynamic is now coming to the professional services industry. Fabulous.
Professional services firms are accustomed to having many competitors. But what do we do with the new, crazy folks who aim to disrupt the entire industry? Here are three steps to use our current advantage to meet these challengers head-on.
1. Pay Attention
It’s tempting to ignore new competitors. After all, we are so much better than they are, aren’t we? And while their solutions may be innovative, they are untested. Folks would be fools to try their solution out. But even if our assessment is true, it is temporary. New competitors often have nothing to lose, so they continue to tinker until they get it right.
There will come a time when our buyers will feel safe enough to try a new option. And once they try and learn the risk wasn’t fatal, the new competitor will have the advantage. At that point, we will be selling from a place of weakness. We will be playing defense instead of offense.
The antidote: Don’t let the element of surprise hurt you. Acknowledge that the competitor is in your space for a reason. Pay attention to the need behind the new innovation. Why does this new “bright shiny object” appeal to buyers? What button is being pushed there? The answers to those questions will drive new options you can offer from a place of strength.
Example from my business: Former marketing folks offered similar branding services at deeply discounted prices (75% off) compared to mine. They appealed to experts who needed 30,000-foot advice on the cheap.
In response to that, I offered a format that didn’t include in-depth market analysis and met the competitor’s price. That meant people who wanted my advice in real time didn’t have to go elsewhere. And the new competitors didn’t have my track record, so they stayed in the “high-risk” category.
2. Give Options
Another response to new competitors is to deny their feasibility and continue our sales conversations as usual. Of course, we’ll come up with all sorts of reasons for why the new competitor is the interior option. The problem is buyers may not agree with our assessment. It’s easy for them to assume that our perspective is based on self-serving preservation. And most of the time, they are right.
When we dismiss the new competitor out of hand, we miss the opportunity to address the need the new solution appeals to. When we don’t acknowledge the need, we give more power to the competitor. We inadvertently tell the buyer, “If you want this need met, go to the competition.”
Instead of communicating all the reasons why the new competitor won’t work, take advantage of their novelty. If you’ve paid attention (see above), you have new options. Now you have to communicate those alternatives to the prospects. Your goal should be to give your prospects the option that addresses the need but without the risk of working with untested folks.
Two approaches for communicating from a place of power:
First, you can do a pre-emptive strike by saying something like, “Hey, have you heard about XXX’s format? They have an interesting point. To address this need, here’s what we are doing.”
A second option is to wait until the prospect mentions the competitor. A possible response then would be, “Yep, we’ve heard what they are doing, and it is an interesting concept. They are trying to address the need for XXXX. Here’s what we can do if that issue is important to you.”
3. Reinvent and Partner
Another advantage these options give us is they buy us time to decide our response to a changing marketplace. If this is the new normal, what is our best option? What needs to be slightly changed, overhauled, or kept the same? These are big questions, and we need time to strategize and implement ideas.
The biggest mistake many experts make is thinking that the short-term options above solve the problem. Like the frog in boiling water, we don’t understand that the market is forever changed until it’s too late.
What to do next: Remember that the above options are stepping stones. Accept the changes as permanent. Then look around and see whom you can partner with to neutralize the competition’s biggest advantage.
Example: I’ve talked about the infographics trend in content marketing for years. Instead of just telling folks, “You need to do this,” I could partner with a design firm that creates infographics at a lower cost. I can create content marketing game plas for my clients and then they can take my roadmap and create a campaign that increases their prominence. I still use my biggest advantage (market analysis and strategy); I just show up in a different place. I now can compete with technology folks who know only how to distribute content. It also creates partnership opportunities with those “competitors” for cross referrals.
Play Your Game
When new competitors show up in our field, it’s tempting to ignore them or deny the need they appeal to. Neither solution works because in both cases, we give up our strengths and play their game. Instead, we need to stop, think, and proceed strategically. By blending what we do best with changing client needs, we can use our current market advantage to thwart their efforts. Let the games begin!