What are Offensive and Defensive Strategies ??

“Best defense is a good offense”

War or game this saying applies perfectly. Sales or marketing choose your term, its sometimes a war sometimes a game. Imagine a world where no one but you rules! Everything that you touch turns into gold. There is no one but you who can do what you can do. It’s an ideal situation. But in real world there are no ideal situations. Starting from home where you compete with your siblings, to school with your fellow students to work with colleagues to a market with competitors one has to compete everywhere.

The start of competition occurs when companies experience threat and pressure in the market because of other companies and this always results in a counter move. Competition can be programmed either by creating new markets or attacking existing markets. An alternative to this is entering a new market, repositioning or increasing a market share. Hence to keep competition at bay companies adopt new strategies to safeguard their status. One such method in discussion is offensive and defensive strategy.

 

Defensive Strategy

Defensive strategy is a reactive strategy. It is a developed to protect market share, position and profitability. It is a strategy that can be used to keep up top position in local and existing market. An example for this could be if a company highlights its USP and advantages of its products and services to prove its better than competition. This is also done by introducing new products and services in the market which is better than what competition has to offer.

This strategy is predominantly useful for a market which is well established in the market but is merely looking at pushing competition away to hold top position or monopoly in some situations as the case might be. This strategy will never include attracting customer attention for the first time. It is to keep the reputation intact which has been built in the market. This methodology is most successful to keep up the customer’s confidence which no new competitor can disturb.

HOW IS DEFENSIVE STRATEGY USEFUL ?

Every action has an equal and opposite reaction

Newton’s law of motion applies perfectly well in the situation of defensive marketing strategy. Marketing in general is seen as a reaction to particular situation in most cases, and more commonly in defensive marketing. Companies are not threatened until a new product comes into competition in the market. Defensive strategy can be used to weaken competition by using techniques that will capture customer interest.  This strategy comes to life only where there is existence of competition.

Example: A company uses advertising techniques to highlight a specific feature of its product, by doing which the competitor’s product will seem inferior in comparison. One of the best in this category was the MAC vs. PC campaign by apple which highlighted its own features in comparisons to other PCs of DELL and IBM, which obviously put down competition and created a success factor.

Guard your Fort

 

Defensive strategy can be used protect the territory of a market acquired by competitions product. Companies constantly come up with new effects to hold up their position and ward of competition. By using defensive strategy it is possible to stop competition from eating into your market share. Companies often safeguard their boundaries by dropping prices or exceptionally improving product feature which competition can’t provide.

Example:

A typical example of this was the price war between Wal-Mart and Amazon. Wal-Mart marked down the price of its best sellers books. Instantly amazon matched its price followed by Wal-Mart dropping prices once again and every time amazon matched the price Wal-Mart dropped it further

Sharpen your vision

This can be done keeping a constant vigil on what in your own market. This will include a thorough research on the competition capabilities and assumption on how far their efforts can get them.  Keeping a constant tab on competitor’s innovations is a good point of view. Companies place products in competition to what has newly been introduced in the market to slash down other from becoming stronger. This counter move will also require faster flow of information and efficiency to build superior features or technology which would be more professional.

Example:

Companies like apple and Samsung continuously upgrade product technology to keep up their market share so that it is not taken away by competition and each time there is an upgrade more customer buy the upgraded version

Attack, analyze and improves

Companies constantly challenge themselves to analyze their position and rebuild on their strength. This can be done with techniques such as market surveys and deep analysis on why the competitor’s product might be more successful. The drop and increase of sale often leads to a situation where companies start analyzing their position and competitor’s product strength. As a defense plan companies establish something that makes them strongest to revise the situations

Example:

A classic and well noticed example to this was in when Tylenol (Johnson and Johnson product) faced threats from other products in the market for pain relief. Tylenol revamped its entire marketing strategy and pulled up the focus to its best USP which is mildness of the medicine and recaptured its position in the market to a very large extent

Define you empire

Defensive strategy is useful to define your empire exactly to an extent where you can create walls which are unreachable to competition. One should exactly know strength and market position and define strategy in such a way that no competitor can mimic it. A good way to do this would be create patents, copyrights. This will protect the power statement of the product and remain with the company with no possibilities of buy in

Example:

The most common use of this method is found among the biotechnology companies, which offers breakthrough innovations in high demand categories so that competition does not replicate the product.

Benefits of defense strategy:

1.   Retention of market share

2.   Prevention of entry for new opponents

3.   Long term contracts

4.   Intact reputation

5.   Market Leadership

 

Value selling model

What is Value Selling ?

                    

                      How many of us have the following problems ??

1.       Our sales people cannot connect with the senior level people in companies

2.       They have neither enough leads nor constant business

3.       They are unable to forecast their sale.

4.       The product knowledge or industry knowledge is incomplete

5.       No consistent methodology

6.       Underselling of product

7.       No confidence to win price wars

8.        Too many product in the market and don’t know how to differentiate your from others

                   How do we fix this? Ever heard of value selling?

Value selling is a concept or a technique which promotes a product by exhibiting its inbuilt advantage or additional value it may provide by using a product or a service. It is an aggregate of techniques used for different set of customers and not applicable for any single customer. It’s a stage of selling where a customer transitions from a superficial view of the product to a radical view.

                                      Why should I use Value selling?

In today’s world of cut throat market customers often as us a question “ I have a  vendor or a service provider who gives me great service and his pricing is one of the best in the market. Why should I use your product or service?” With so many competitors out there in the market, we have to identify those elements that earmark our product from others.

Value selling is a chain that links the path from learning how to differentiate your product highlighting your own current benefit using fresh ideas to adding quantified value to the customers’ business without meddling with the price.

How should I use value selling?

1.       Treat selling as a consultation:

Do not sell a product on the lines of how customer will benefit on the basis of price. Selling has to be consultative to the extent where customer gains mileage on other aspects which helps his business grow over all and helps him save his overall cost.

For example: if you are logistics service provider, managing a customer’s warehouse, designing a software for him on warehouse Management system (WMS) will be great idea. Though you might charge the customer on this, it will definitely bring down his manpower cost eventually over a longer period of time.

2.       Know your business:

To be honest to the customer and making him believe what you tell him, one should believe his own product. To have trust in the product comes with complete knowledge about the product which is the back bone of good sales technique. Being completely trained in the product, refreshing it and also allowing your on-job training to sink in is imperative to promote a product positively.

3.       Learning to differentiate:

Knowing your product is a mandate, and just as important, is to know your competitors product. Demarcated selling always gives your customers a clear sense of understanding on why they should use your product as against the customer’s product. But what one really needs to keep in mind is that is that it not necessary to show the negative aspects of your competitors product, its more important to show the positive aspects of your

4.       Be ahead of the game:

What interest’s person mostly in senior level management is mostly what runs in the market and how that is going to have a changing effect on their business? A conversation over the tea on with them on what is changing their industry and yours, will give them a boost of confidence in your abilities to take care of your business when there is a chaos in the market and economy

5.       Give it to them on a platter:

What attracts us to a food plate that contains more than one variety? It’s the goodness of getting best of both worlds or as many as is offered to us. Giving value, price and service is not only well combined package but the one which is covered in colorful packages and wrapped with a ribbon. As the customer unwarps every layer small or big he will have a  sense having achieved value for money. It is not necessary to provide Freebies in every case but just necessary to highlight the very inherent quality of your product which values more than money.

6.       Analyze your customer’s needs:

Sometimes we tend to give customer what they don’t need. The fact that customers do not reject what is offered them is not a proof of necessity for it. a detailed analysis of what the customer requires will help us design our product/service better in such a way that it covers all of the customers requirement. It would be a great idea to request your customer to provide a score card so that it can give you periodical reviews on their levels of satisfaction and needs of customer.

7.       Work on consolidated selling:

No sale can be successful without team effort. To provide value to customer is very important for him to understand that in all circumstances a complete team is backing you up manage his account, like the customer service, operations, accounting, technical or an upper management team. This also leads to accountability being shared and chances for increase in success. This is turn will lead to an organic improvement in current process.

8.       Nail the deal:

The sales pitch for value selling should be to close the deal and not to request for opportunity to consider you. The proposal should be strong enough to make the customer understand that the product is a bundle of value adds and there is no going back as it does not get better this and neither can he get anything better than yours in the market. And for this going back to basics of knowing your customer thoroughly is very important.

Rectify your mistakes ! A must in sales to become successful.

 “Great services are not canceled by one act or by one single error”.Even more safe is to predict errors and to control them.

Today’s blog is about rectifying the mistakes identified as those commonly made by sales people.

  Inefficient or insufficient database:

Database is like gold mine. Gathering one is as difficult as retaining it. The source of database can be historical data, data with market information or those which can be purchased from a reliable data source. The best place to start looking own book, laptop or computer

            Overdependence on internet:

Use internet effectively as the first step to data collection. Any data taken from internet needs to be validated or vetted with a phone call or a detailed meeting. It would be wise not to make  a proposal on the basis of data from internet and one can never gain complete knowledge from it. However before visiting a prospective client especially if they happen to be big it’s a great idea to collect details which provide information about their nature of business, not suggestions on your nature of business and how effective it would be.

    Improper questioning:

Probing is the key to a successful proposal. To have a meeting that ends with having collected most of the require information a questionnaire will always be helpful. This helps in not missing out any important information. A lot of people carry profile sheets so that all data about a customer can be recorded and all of the customers’ needs are taken care of.

               Narrow Minded approach:

 Probing is not a part of initialization it is the start of a sales process.  To set an exercise to question customer even if they are not of immediate importance will be helpful for reference in a future circumstance, because what is a just an information today may be a opportunity tomorrow. Target should be to know at least 70%-80% about the customer in the first meeting and rest over the course of time

  Discontinued follow up:

Follow up is the only way to convert prospect into an opportunity and further into a successful business. No business can ever survive with only one customer or one part of a customer’s business. Follow up provides us the opportunity to be at the right time at the right place. It makes us the top of the mind recall for the customer.

              Poor after sales service:

It’s important to be there for the customer when he needs us rather than be there for him when we need him. Incremental business is as important as new business. Keeping in regular touch with then customer after initial sales always brings in more business and this can be done by scheduling meetings with customers on a in a planned manner so that these customer are never forgotten.

               Competitive industry data:

Every customer with good potential has a seller/ service provider attached to them. Similarly every competitor has a top customer. What is important is to find a source that provides information about the competitor. Once you know the source it is important to use the source to keep constant tab on the competitions foot hold.

    Competition strength analysis:

Market intelligence offers a competitive edge that one cannot achieve in its absence. The source of market intelligence can be a internet or a from a mode that makes it its job to provide that data. However the most accessible form of data would be where you ask your potential customer on what is it that makes your competitor better than you in certain areas.

  Wild goose chase:

The best way to not to waste time on a customer is to understand is to understand what is required to win a business  and set timelines. Once all necessities have been taken care of its mandatory to see what stops the customer from giving us an opportunity. Sometimes it might be useful to step up a level to a decision maker. However when you start going over and beyond timelines its necessary to draw out a strategy.

 Forget the missing:

Going through ones list of customer and pipeline helps identify lost and down trading customers. Keeping in touch with them over a mail or a phone call keep their memory refreshed about you and also reiterates that you are still interested in their business. This can lead you back into the doors of a lost customer at any time