Q&A Write-up: June
Disqualifying early and Crushing your competition
Q&A’s happen once a month where I answer a paid subscribers question and do a write-up answering it for the entire community.
June’s question:
“Deal context: This deal started in order to replace their current vendor. They’re looking to change because of minimal adoption within the org, and high costs and minimal visibility (missing key metrics).
A prior rep from my company which is now at a "low cost" competitor is running a deal cycle with my prospect.
The prospect loved our demo, but thinks it’s overkill for what they currently need.
The low cost competitor does not have as many feature capabilities as us, but would serve as a direct replacement to their current vendor at a similar, if not lower price.
They only have budget (this year) to replace the current vendor, but have indicated wanting to add additional products that we can provide. As a side note - The prospect validated that an outage of their platform can cost up to $100k per hour, which can be solved though better [redacted].
They asked for us to send our price for a direct replacement of their current vendor after the call and to include "all the bells and whistles for the future".
Hard to read one way or another in terms of reaction, but I know that our solution (including a key metric that they are missing) will be about XYZ ARR more that what they are currently spending. The future state quote with all the bells and whistles is XYZ more. Unsure about competitors pricing.
They have started a Proof of concept with the competitor which does not have a specific time line that has been communicated. They've been cagey about the details, but have indicated that because of a lean development team, it may be hard to do a bake-off.
We have a call scheduled for XYZ once the prospect has talked to the key users of the platform to get more information about the Proof of concept and requirements.
What should be the main focus points of the next call to give my platform a chance to PoC and create FUD on the competitor?
I’ll split my response into 2 sections.
Prevention.
There are many issues that could / should have been prevented, or largely mitigated before arising.
You are always in your situation because of things that happened before the issue occurred.
Related Reading:
Solution. What’s done is done so how do we make the high % choice(s) moving forward?
Prevention
The prospect loved our demo, but thinks it’s overkill for what they currently need. The low cost competitor does not have as many feature capabilities as us, but would serve as a direct replacement to their current vendor at a similar, if not lower price.
Mistake #1: Why are you showing them a demo before obtaining commitment, setting expectations, and having all the background details first?
You already know, or should know, they’re in talks with the lower cost competitor. At this point in the deal, you should be encouraging the prospect to go with them.
🐲: John, I don’t think it makes sense to do a demo at this point. I can tell you now we are probably going to be overkill for what you currently need which is.. *checks notes*.. a direct replacement to your current vendor at a similar price.. Sure, [competitor] doesn’t have as many feature capabilities as us, but again, they’d serve as a current replacement to what you have now.. plus you’re going to save a decent amount of money going with them. I don’t see why you wouldn’t do that?
Chad note: I bolded “current” to sub-communicate it would be a temporary move if they do decide to go with the low cost competitor.
Now let’s say they responded with:
“You know what, you’re right”
You can stick the shiv in:
🐲: And would it be fair to say that if they do a good job, you’d stick with them and not make any changes throughout 2025?
or
🐲: And assuming they do a decent job.. It wouldn’t be worth the hassle of changing systems again would it?
and/or
🐲: Doesn’t seem like you’re concerned with allocating the resources to get up and running with them, and then upgrading later down the line with a different vendor?
If they agree, you walk away.
If they push back, you keep Disqualifying i.e
Prospect: Hmm yeah it could be a hassle because of XYZ, resources for implementation, etc
🐲: Nothing you guys can’t overcome right?
Disqualifying = Making the prospect fight for it
You get the idea.
Chad note: ”Wow’ing” them with a demo so early on actually hurt you here. You showed them an objectively impressive platform thinking they’d be convinced. Their conclusion? “No wonder you’re so expensive! It’s overkill for what we need at the moment.” And current pain will always be more urgent than future pain.
—
They only have budget (this year) to replace the current vendor, but have indicated wanting to add additional products that we can provide. As a side note - The prospect validated that an outage of their platform can cost up to $100k per hour, which can be solved though better [redacted].
They asked for us to send our price for a direct replacement of their current vendor after the call and to include "all the bells and whistles for the future".
Hard to read one way or another in terms of reaction, but I know that our solution (including a key metric that they are missing) will be about XYZ ARR more that what they are currently spending. The future state quote with all the bells and whistles is ~6x more. Unsure about competitors pricing.
Mistake #2: Giving the farm away and getting nothing in return
The tell is when you wrote “Hard to read one way or another in terms of reaction”
Yes, it is hard to read what their reaction is when:
1) You give them everything they ask for while asking for nothing in return
2) You don’t challenge them or stress-test any of their answers
Good on you for getting them to validate their problem ($100k/hour for an outage)
But remember, we are always Disqualifying and pushing them away..
Prospect: An outage of our platform can cost up to $100k/hour which we can know can be solved through better [redacted]
🐲: I get the feeling outages don’t happen often otherwise you guys would have had it solved by now.. fair?
Prospect: Yes well we do have workarounds..
🐲: If you have workarounds that work then why change?
—
The prospect wanted to compare you directly to the competitor (without all your bells & whistles) and wanted pricing for the future too (with all the bells and whistles)
Scenario 1: Comparing you directly (without the bells & whistles)
🐲: John even without the premium features & capabilities we’re still going to be more than you want to invest because we are a premium product. I can save you a lot of time by telling you that upfront.
Prospect: Blah blah
🐲: But you’re still going to end up going with them aren’t you? Why / Why not?
🐲: What would you need to see or have demonstrated to you in order to justify the difference in investment?
They will struggle to answer. And you need to keep on (gently!) getting them to see that what they are saying is BS
Chad note: Executives hate being told what to do so when I say “we will be more than you want to invest” I am inviting them to disagree with me 😉
2nd Chad note: The prospect may refer to your extra features as “bells & whistles” but you need to stop doing that too. I don’t know if you are doing that but it’s important to note. You are commoditizing your tech by referring to your features & capabilities as “bells & whistles” too
Scenario 2: Wanting pricing for the future too (with all the bells & whistles)
Unless pricing is on your website, then the answer is No.
You say:
🐲: I can’t give future pricing now because I don’t know what changes we will make by the time you do sign.. and I don’t want to give you wrong information. You said you can’t move forward with us until at least 2025. That’s minimum 6 months from now. A lot can happen in that timeframe, including upgrades to our technology, new features, etc. However, if you wanted to sign today and have implementation begin in 2025, then I can check if we can do that for you. Up to you.
Stand your ground.
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What did you get in return for sending them all the information they asked for? (the pricing, future pricing, all the bells & whistles?
There’s a high probability that you got a prospect who took all of that information to your competitor and asked:
“How much of this can you do and what’s your best price?”
—
but I know that our solution (including a key metric that they are missing) will be about XYZ ARR more than what they are currently spending.
What if you asked them
🐲: How important is [key metric] to you right now? Is it worth paying significantly more to use us? Or can you hold off on it till end of year?
Nothing bad has happened as a result of not having the key metric right? So why not continue as is?
—
They have started a Proof of concept with the competitor which does not have a specific time line that has been communicated. They've been cagey about the details, but have indicated that because of a lean development team, it may be hard to do a bake-off.
I would have walked away from this deal a lot earlier.
I’d tell them:
“We are not a fit right now. Let’s revisit when it’s relevant again in 2025.”
Don’t let them pimp you out for all your information only for them to use it as a negotiation tactic against you indirectly (through competitors) or directly (against you in future negotiations i.e “why did the price go up?” etc)
And of course they are cagey about the details.. you are just another salesman to them.
And we know we how buyers feel about salespeople, don’t we?
Buyers expect the world from you, you give it to them, and then they give you nothing in return.
It’s all part of the Frame Game.
Chad note: I’m emphasizing all of this to show you how the problem you find yourself in is the result of many small problems accumulating throughout the deal cycle. I want you to see how much harder we make our jobs by the time we find ourselves asking “WTF should we do?”
Solution
What’s done is done so let’s talk about what to do next.
We have a call scheduled for XYZ once the prospect has talked to the key users of the platform to get more information about the Proof of concept and requirements.
What should be the main focus points of the next call to give my platform a chance to PoC and create FUD on the competitor?
The assumption is that the competitor is meant to serve as a temporary solution until they have budget for your solution.
We don’t know how true that is but let’s continue with it.
Our want is to get the prospect to choose our platform over the competitor, and then over time, when they have budget / other favorable conditions are met, upgrade and add all the additional features / capabilities
So the strategy, the high % choice, would then be to get the prospect to discover the costs/risks/impact associated with their current decision / path.
We need to Frame the discussion as a discussion of tradeoffs and then ask questions in order to get them to work it out in their head.
Starting the Conversation
🐲: John, before we get started, I wanted to take some time to better understand a few things that I’m still a little unclear on.. and then we’ll take it from there. Is that alright?
So…
*begin asking questions*
Questions
You need to ask questions around the costs/risks/impact associated with their current decision / path.
Bonus points if you know the competitors shortcomings.. because then you can create questions around that too.
Example of questions:
🐲: When you spoke with [competitor] and they told you that migrating from their software would [cost/risk/impact].. what was your reaction?
>they didn’t tell us that
🐲: Hmm I wonder why?
>I don’t know..
🐲: Ah I wouldn’t be too worried about it.. It doesn’t always happen.. I’m sure you guys will be the exception!
—
🐲: What is the success criteria for the Proof of concept?
^ Does the prospect even know? This is a great opportunity to help them establish that criteria and then talk about your competitors shortcomings.
Chad note: After creating the criteria, show them how you can beat your competitors on some or many of those criteria.
🐲: What about [important criteria the prospect may have missed and/or important criteria the competitor missed / doesn’t have]? How are you thinking about that?
🐲: Did [competitor] also tell you that [competitor disadvantages]?
🐲: Help me understand your thought process. You’re going to invest development resources now to get up and running a proof of concept.. what happens in the future when [impact of competitor shortcomings]?
If they’re adamant about their current path.. then something else is happening in status quo to drive them to use a bandaid over a solution.
You can ask:
🐲: Hmm I get the feeling there’s more to the story here..
🐲: You do realize you are going to be paying more in the long run with your current set up.. [cost of not having key metrics, cost of implementation, cost of changing vendors, etc vs paying a little more upfront with us and adding features as you need it]
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The Good, the Bad, and the Ugly Frame
Or you can go the Brutal Honesty route and directly tell your prospect about the competitors disadvantages and shortcomings.
🐲: Can I be brutally honest about [competitor]?
>Yes
🐲: Are you sure? Because I’m going to take the gloves off
>Yes
🐲: If you go with [competitor], then yes you will get [good things]. However, where they fall short is [bad things].. and I’ll be brutally honest here.. [ugly things]
—
Hope this helps. And let me know how it goes!
-BTSG
RE: The Accelerator
Accelerator Registration will open up in the first / second week of August for course buyers. I will make an announcement as we get closer. Stay toon’d!