Saturday, August 31, 2013

How to Unseat an Incumbent?

I was recently asked by one of our technology services customers how best to help their sales teams
unseat an incumbent solution provider, and if it could be done proactively and provocatively.

According to a recent study of tech buyers, the number one reason for changing vendors was not that the new provider had a vastly superior technology, or delivered thought leadership about a changing business landscape, but most significantly about the challenger providing a solid business case for change.

This business case quantifies how the new vendor could deliver superior business benefits (improved productivity and processes, reduced risks and revenue gains) while at the same time lowering total cost of ownership (TCO - lower IT capital and operating costs) compared to the current vendor.

According to research by UBM Tech, the top factors that led to a change in vendors included:
  • 42% - Case for Change, where the new vendor demonstrated a business case for change
  • 41% - Unrealized ROI, where the existing vendor did not deliver the knowledge or training to realize the value in the solution
  • 38% - Superior Knowledge, where the new vendor demonstrated a better understanding of the customer's company and industry
  • 27% - Thought Leadership - where market research demonstrated a change in business landscape.

The Bottom Line
If you are the incumbent, in order to maintain the account loyalty you need to assure that your customer is achieving the expected value, as 41% indicated they switched not because of anything the challenger did, but because the incumbent failed to prove realized ROI.

If you are the challenger, in almost half the cases where a change occurred it was the business case that made the difference. Enabling your competitive marketing to focus on the financials can help frame the choices in a new way for your prospect. While sales reps and consultants can be armed with tools to deliver business case conversation and quantify the better business value and lower TCO of your solutions.

1 comment:

Mark Carbone said...

Great post. Needed that today for strategy session we're going through!

Mark A Carbone