How Distributors Improve Customer Retention A common rule of thumb in distribution is that it…
Gathering Competitive Information
A robust CRM system allows you to track your competitors so that you can see which competitors are involved with which customers and which deals. That in itself is useful; however, creating a full profile of each of your competitors gives an edge to your sales people.
Don’t limit your list of competitors to the usual suspects. Many distributors think only of other distributors who sell similar products in their specific geographies. Today, competition is coming from all angles, other distributors, online sources, Amazon Supply, big box retail, manufacturers selling direct and more.
The Competitive Profile
When you’re building your competitive profiles, we recommend starting with the following three areas:
- Their products and services. What are they selling? Do they have completely competitive lines to your company or is there overlap? Do you have an opportunity to shop them to understand their customer experience first hand? Do they compete on price, service levels, value-adds, inventory stock or something else?
- Their methods. How do they handle new releases, marketing, customer communications and can you subscribe to that information? How many reps do they have? What are their strengths and weaknesses?
- Customer satisfaction. What are their service levels like? What are customers saying about them? Have you heard any about any common complaints or missteps?
The Importance of Win/Loss Analysis
Many organizations still rely on anecdotal information when conducting a post-mortem analysis on a closed deal. With a distribution-centric CRM system, there is no reason to rely simply on legends and lore when it comes to competitive information. You can record win and loss information on each deal for each competitor to help you generate new strategies.
A proper win/loss analysis requires some cooperation from your new customers and lost prospects to fully reveal the real motives for their decisions. You should be able to collect this information immediately with new wins. With losses, it may be best to wait a few weeks for the dust to settle. Then you can also interview them on the success of their decision to go with a competitor and find another opening to win their business. Whatever you do, don’t wait too long or the prospect will forget the information, even if the job you lost is months long.
Be sure to ask your customers and lost prospects what they were looking for in terms of product and service and why they made their decision. During the discussion, look for your own strengths and weaknesses as well as your competitor’s. Things like miscommunications or misunderstandings about your products and services, particular selling points, features or product lines, delivery times, word of mouth and more. The longer you do this analysis for each competitor, the more patterns emerge.
Other Sources of Competitor Information
Thanks to the Internet and social networks, information about your competitors is more available than ever. Still, the most important way to uncover competitive secrets is to have meaningful and regular conversations with your customers and record that intelligence into your CRM system so that all of your staff can benefit from your intelligence gathering. Those conversations are also great for learning where your own customers would like to see you improve.
Don’t forget to ask your vendors about your competitors. While many vendors will hold their cards close to their vest, some will at least share generic information about growth and performance that will allow you to extrapolate and make inferences. Other vendors may be will to share information directly with you depending on your relationship, especially if you ask for it in the interest of better serving your mutual clients.
There are many other sources to explore as well, including:
- Visiting their website and conducting internet searches to see what comes up under their name.
- Annual reports for public companies are rich with information as well as comparable stats like revenue and profitability to
- Copies of their marketing materials and emails
- Regular debriefs with your own sales staff
- Trade shows and events—be sure to stop by their booth and strike up a conversation with their reps and take some literature with you
- Read their press and trade association listings—setting up a Google news alert is great for tracking your competitors PR as well as news about customers, vendors and industry associations
- Visit one of their branches and buy something—while you’re there, take pictures of their displays and facilities and listen to their customer conversations.
As you gather competitive information, remember that SMP allows you to manage your competitor information to quickly identify which customers are served by which competitors, either on the whole or by product category. Further, you can also track multiple competitors for a single customer or by product category and even track the competitive sales people who work with those customers. As you’ll see in the next section, this information is extremely powerful when it comes to running your competitive plays.