First things first. What is “competitive displacement” in sales?
Competitive displacement is a fancy term for winning a new client who’s currently working with one of your competitors.
How do you win them? You get them on the phone, build trust, and offer them better value. Easy, right?
Some might call this stealing clients. But I prefer the official term competitive displacement. And it’s totally above-board and ethical.
Because look, your competitors are busy trying to steal your clients as we speak. So in some ways, competitive displacement is a necessary sales strategy for the survival of your company. Remember, all is fair in love and sales!
Now of course, you can’t just barge in like a bull in a China shop. This strategy requires a strategic approach. It also requires some important ethical considerations. So we’ll dig into all of this today.
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3 Reasons to Call Your Competitors’ Clients
- They are already in the market. And they are actively paying for a similar service as yours.
- The bar is often set pretty low for service quality and results, so it’s easy to “WOW” these clients.
- It’s likely a large target audience that is virtually untapped.
Competitive Displacement Done Right
If you sell for a large company, you can usually procure a lead list of your competitor’s clients by using LinkedIn Sales Navigator, Zoominfo, or any quality lead generation tool. You’ll also come across your competitor’s clients in your normal prospecting and cold calling routine.
Then pick up the phone and simply set the tone that you want to have a conversation. Do not frame it as a pitch. Even say something like “Don’t worry, I have nothing to sell you on this call.”
On the phone, ask poignant questions about their experience with your competitor. And listen, listen, listen. Tease out some pain points if needed. There’s a good chance they’ll divulge all their grievances with Mr. competitor. Take copious notes here.
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Then ask for a little time to go over this, and confidently ask to get back on the phone later in the day (Remember, this call wasn’t to pitch!).
When you get back on the line, you switch into trusted-advisor mode who desires nothing but the best for that person. So you remind them of their current arrangement and consult them into a better arrangement.
Better service. Better quality. Better ROI. Better value.
Also, this is the time to communicate your competitive advantage — that secret sauce you offer that your competitor could never touch.
Why Clients Leave Competitors (tease these out in your call):
- Poor service or lackluster support
- Misaligned expectations
- Lack of innovation or outdated solutions
- Price or ROI concerns
- Relational issues or politics
- Contracts up for renewal
5 Keys to Success
Positioning – I’ve already hinted at this, but it’s worth repeating. You must position your product or service as a no-brainer choice. Lean into your key differentiator.
Case Studies – Share case studies and testimonials to showcase how X client switched to your company and saw X result. Take the risk out of the transition for your client. And in this vein, reassure them that the onboarding process is seamless and easy.
Tailored Solution – Most vendors offer some sort of cookie-cutter solution. So instead, commit to learning about the client’s weaknesses, challenges, hopes, and dreams. And then build a tailor-made service offering that makes sense for them.
Remember — Your prospect doesn’t want another vendor, they want a partner.
Timing is Key – If possible, keep a close eye on annual contract renewal cycles, changes in company leadership, and those CRM notes you jotted down: “Get back to me in Q1.” Try to time the call for when the prospect is already considering leaving your competitor, or at least the conditions are ripe for it.
Build A Strong Digital Presence – If you haven’t done so yet, start building up credibility. Before or after a prospect hops on a call, they WILL Google you. What pops up? Your website, your blog, your LinkedIn profile with insightful content that proves you’re an expert? If not, get at it. This is not a nice-to-have. It’s a must-have in today’s competitive environment.
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How to Do Competitive Displacement Ethically
It’s best practice not to steal your competitors’ clients. Instead, borrow them indefinitely. Whatever you do, here’s what not to do:
- Never speak negatively about your competitor
- Avoid aggressive sales tactics
- Be realistic about what you can offer and the results you deliver
- Respect confidentiality and never divulge sensitive information you learn about your competitors
- Be professional. There’s no reason to directly undermine your competitor or their credibility. Instead, focus on the value YOU deliver.
- Always prioritize your prospects’ best interest. If it’s truly not a better fit for them, don’t move forward with the sale.
- Recognize your competitors’ strengths (where it makes sense). Don’t be afraid to say, “Yes, they do that well, don’t they.” This will show goodwill and it will build trust.
Final Words
You will never hear this sales objection the same again: “We already have a vendor.” It should now trigger in you a competitive drive to convert the client to your product or service.
Competitive displacement is so critical because it kills two birds with one stone. Gaining a new client that was once your competitor’s client simultaneously strengthens your company and weakens your competitor. It’s a win-win.
While your competition is playing checkers, you’re out here playing chess.
Just remember there’s a right way and a wrong way to execute this strategy. So be sure to keep in mind the ethical considerations I’ve highlighted above. You’ve got this.
Until next time…
Johnny-Lee Reinoso