Hellen Davis doesn't look particularly menacing. The president and CEO of Indaba Inc., a 25-employee management consultancy in Malvern, Pa., is blonde and pretty, unfailingly polite, and quick with a joke and a smile. But when it comes to convincing potential clients to choose her company over the competition, Davis's placid exterior masks a bonafide barracuda.
With a wink and a joke, she'll turn another consulting firm's strengths into weaknesses: They may be bigger, but Indaba is better. Sure, they've been in business longer, but they do the same thing over and over again, while her firm is constantly innovating. "You just have to 'dis' the competition," she says. The way Davis sees it, she doesn't have any choice, especially in a field as competitive as consulting, and she credits her deft negative touch with propelling Indaba's sales to $3 million in 2003. "People think I'm a nice person, nicer in business than I am," she says. "They really don't expect that I'm playing high stakes with them. Isn't that horrible? It's wicked!" Davis says this gleefully, with nary a trace of remorse.
Few entrepreneurs are quite so unabashed. But successful selling is largely a matter of distinguishing yourself from the competition. And as the recent spate of mudslinging on the presidential campaign trail suggests, "going negative" is an effective and time-honored way of accomplishing just that. Of course, slamming the competition is a high-stakes game. Do it wrong, and you'll probably blow the sale--and end up looking like a world-class jerk at the same time. "It's a minefield," says Cleveland-based sales consultant Andy Birol.
The first thing to understand is that as a sales tool, going negative requires a scalpel, not a sledgehammer. Subtlety and elegance are everything. So before you make your first cut, do your homework, says Tim Williamson, president of the Idea Village, a small-business incubator in New Orleans that trains entrepreneurs in sales techniques. Say you're planning to make note of your competitor's lousy customer service, poor management, or faulty products. "First, you've got to make sure that you're right," says Williamson. "It has to be 100% true." Credibility and specificity are key. Don't tell a prospect that your competitor's customer service "is horrible." A better approach: "According to XYZ study, they have the lowest customer satisfaction scores in the industry." Indeed, false accusations can land you in legal hot water. It's called slander, and if your trashing is a tissue of lies that ends up harming your competitor's business, you can be sued successfully. The best defense against slander is the truth, so don't skimp on research.
Before you pounce, think about how your rival will respond.
That also means researching your potential client. "You want to understand the customer's business goals, so that you can identify the gap between where the customer is today and where the customer wants to be," says Birol. After all, you just might be able to blame that gap on the customer's current supplier. (On the other hand, if you find that no such gap exists--that is, if your prospect is thoroughly delighted with its current vendor--you probably have no chance of winning that business anyway. Move on to a better prospect.) A great way to get those goods: Seek out employees your competitor has laid off, invite them to lunch, and pump them for information. That was how Davis learned that one of her main competitors--a big name in the consulting biz--used impressively credentialed senior execs to land contracts, but farmed out the actual work to less experienced junior staffers. Later, at a sales call, when Davis was asked why Indaba was better than this bigger, brand-name competitor, she had the perfect answer: "With the big boys, I know you've seen their principals charge in on their big white ponies," she said. "But those are not the people who are actually going to do the work. With us, you know who we are and who you'll get." The room erupted in laughter, and at that moment, she knew she'd landed the business--a $1.5 million contract.
Okay, let's say you've learned that your prospect is less than satisfied with its current supplier--and that your competition is vulnerable in certain areas. Before you pounce, think through how your rival will react to your attack. "It's like a political campaign--the minute you go on the offensive, they will respond," says Williamson. "You have to think four or five steps down the road." This is particularly true if, as is often the case, you're a small business going up against a much larger company.
That's why the most successful practitioners of the negative approach let someone else do the slamming--ideally the sales prospect itself. Call it the "ventriloquist strategy." Start by asking a series of open-ended questions--ones that you already know the answers to, thanks to your research. Some examples: If there were one more thing you wish your current supplier could do, what would it be? What is the single biggest problem you have with your current vendor? What is the impact of that problem on your own business? Why do you continue to work with that vendor? "If you ask good, open-ended questions, you can prod and provoke customers into divulging the problems they have with your competitors," Birol says. Then, it's just a matter of sitting back and offering a shoulder, some sympathy--and your own product or services. (A variation on the ventriloquist strategy is to come armed with customer testimonials that bash your competition for you, suggests Williamson.)
Indeed, a subtle, well-placed question may be the most effective tactic you have. Randy Herz, senior vice president at Herz Financial, a 12-employee financial services company in Farmington, Conn., doesn't like to go negative. But he will when he has to. Herz was recently vying for a big estate-planning job when he learned that a rival was raising questions about his company's capabilities. Later, in a meeting with the client, Herz came armed with his own question about the competitor, a sole proprietor. "I understand that he's about to go into retirement. Is that the case?" Herz asked. (He knew it to be true.) The client hadn't heard the news. Herz won the business and learned that the single factor that made the difference was the knowledge that his company would be around for the long haul. Herz is convinced that the subtlety with which that information was communicated made all the difference. "If you say, 'You know what, that guy's a real jerk, you'd be dumb to do business with him,' it's not likely that someone's going to buy it," he says.
A backhanded compliment can be equally as effective. When Rory J. Cutaia, chairman and CEO of Telx, a 40-employee telecom company in New York City, is asked about the competition, he has a line ready: "You know, I really admire those guys," he'll say. "I admire their determination and the challenges that they must have to overcome on a daily basis just trying to keep up with us." It usually gets a laugh, but it also leaves a faint negative impression, which lingers when Cutaia moves on to discussing his own company. Then, there's the "but and however" trick--a favorite of Hellen Davis. "Anything before the word 'but' or 'however,' no matter what it is, they'll remember it less," she says. For example: "That company has a great track record. But it has a limited range of clients." It sounds silly, but think about it. If someone said to you, "You know, you look great, but..." wouldn't you be desperate to learn what comes next?
What comes next, of course, is a positive message about your own company. No matter how skilled a basher you become, it won't make a shred of difference if you can't make a convincing case for yourself. Sure, you want to dispatch with the competition, but you don't want to make your entire sales pitch about them. So hit fast, and get back to you and your company as quickly as possible. "If you talk about your virtues, the prospect will probably conclude that your virtues are the flip side of the competition's shortcomings," says Ira Davidson, director of New York City's Pace University Small Business Development Center. "Let the customers draw their own conclusions."
A good defense may be the best offense you have.
Perhaps you're shocked--shocked!--at the idea that anyone would dream of going negative during a sales pitch. But chances are, your competitors hold few such scruples. So you need to think about how to respond when your company becomes the target of a negative campaign.
The most important thing is not to be put on the defensive. Tim Berry, president of Palo Alto Software, a business-planning software publisher in Eugene, Oreg., learned that back in 1996. His main competitor, Berry discovered, was raising all sorts of questions about Palo Alto--spreading misinformation about the capabilities of the company's products and suggesting that Berry himself was less than capable because his background was in software design rather than business planning. Palo Alto was a young company, its product new to the market, and a sustained hit to its reputation could have been disastrous.
But rather than getting angry and launching a negative campaign of his own, Berry responded with a deft act of business jujitsu. Instead of responding directly to the attacks, Palo Alto tweaked its own sales presentation, emphasizing the fact that Berry is a Stanford M.B.A. with more than 20 years' business-planning experience, and stressing the quality of its engineers. The new pitch also did a better job of demonstrating the specific capabilities of Palo Alto's software. Says Berry: "Knowing about the attack helped us strategically."
Berry's prospects never mentioned the attacks during a sales call, but should it come up, it's important to remain calm, says David Rubin, a partner and sales consultant at JH Cohn, in Parsippany, N.J. Rubin also suggests instructing your attorney to write a strongly worded letter telling your rival to back off. In Berry's case, the combination of an attorney's letter and the new sales presentation did the trick--the competitor beat a hasty retreat. And Berry got the last laugh: While the trash-talking competitor was twice the size of Palo Alto Software at the time, eight years later, its market share is one-fifth that of Berry's company.