Why You're Losing Deals to New Competitors

Last week’s issue covered the leadership meeting that slid back into status updates. This week is a letter. I wrote it to an owner who just lost a job to a company new to the market and is still turning it over on the drive home. The owner is a representation, a pattern rather than one company. If you advise owners, read over their shoulder. There is a section near the end for you.

Dear Owner

You lost one last month that you should have won.

You have more people than they do, more equipment, more years in business, and a longer list of customers who will vouch for you. The company that got the job is new to the market. When you asked your sales manager what happened, the answer was price.

Maybe it was. But price is the easiest reason to write down, because it is the one reason that is nobody’s fault. I wouldn’t accept it until I heard it from the customer.

Here’s what I think happened, and it starts with a football game.

The Shirts

My senior year of high school in southern Indiana, our football team made it to the state championship. Our school was seven years old. They came out of a conference that had won three of the last four state titles.

Right before the game, our coach walked us over to their side of the field. Their fans were standing there in shirts that said “state champs.” Printed, proudly, before kickoff.

We won that game, 21 to 14.

I have thought about those shirts for more than forty years. Somebody looked at that matchup, decided how it would turn out, and printed the result before the game was ever played.

I am telling you this because in your story, you are not on my team. You are the side of the field with the shirts. When you have been champs, the shirts are easy to print. The years in business, the size of the crew, the name the customer already knows. All of it is true, but none of it matters when the customer decides.

What the Customer Saw

Here is the same deal from the customer’s chair.

The customer sent the same request to both of you on a Monday morning. The new company called back before lunch. The owner was on the call, asked a few questions, and had a price in the customer’s inbox by Wednesday.

Your company responded on Wednesday. The request moved from the front desk to sales, then to estimating, and finally waited for the one person who signs off on quotes above a certain size. Your price went out two weeks after the customer asked. It was a fair price. It may have been the better one. By then, the customer had already said yes to someone else.

Nobody at your company did anything wrong. Every one of those steps was added for a good reason, years ago, probably after something went wrong once. That is how a company your size gets slow. Nobody decides it. One careful step is added at a time, and nobody ever adds them up.

Two Hours a Month

Here is what I would ask you to do. It is not a project. It is two hours, once a month, on the same day each month. Bring the two or three people involved in a deal from the first call through the signed order. Call it the competitive read. It has four parts.

The first half hour: the ones you lost. Pull the last three deals that went to someone else. For each one, note who won it and why, using the customer’s words, not your salesperson’s. If no one knows what the customer said, that’s your first finding. The fix is a phone call: “We lost your job, and I would like to learn from it. What did they do that we did not?” It’s an uncomfortable call. Make it anyway.

The second half hour: your own front door. Send a request through your own website or call your main line a week before you meet, just as a stranger would. Then start timing. How long did it take for someone to answer? How long until they gave you a price? How many people handled it along the way? Bring the numbers to the session. You’ll want them next month.

The third half hour: their front door. Read what the company that beat you says publicly on its website, in reviews, and in job postings. Look for one thing: What do they promise that you can’t promise today? A quote the same day. A named person who answers the phone. Stick to public information. You don’t need to pose as a customer to find out what they tell every customer.

The last half hour: one decision. Not a list. Just one change, with one person’s name beside it and a date within the next thirty days. Maybe the quote that needs three signatures gets one. Maybe the web form gets answered that same day. Whatever the first ninety minutes pointed to, put it on the scoreboard alongside your other priorities, so someone has to answer for it again next week.

Two hours a month is only three working days a year for each team member. That is not much time to spend finding out why customers choose someone else.

If You Advise More Than One Company

If you are the fractional CFO or COO, the accountant, or the consultant, this exercise is easier for you to start than for the owner.

You can walk through the client’s front door as a stranger because nobody at the front desk recognizes your voice. You also work with more than one company. The owner sees one lost deal and takes it personally. But if you’ve watched the same slow quote cost another client a customer, you can point it out without naming names, and the owner hears a pattern, not an accusation.

Offer to run the first exercise. Bring the numbers from an outsider’s perspective. Leave the decision to the owner at the end.

The Test

Three questions for this week:

• For the last deal you lost, can you explain why in the customer’s words?
• If a new customer sent a request through your website this morning, do you know how many hours it would take for someone to respond and how many days until they had a price?
• What does the company that beat you promise publicly that you cannot promise today?

If the second one stopped you, start there. Sending the request takes ten minutes and a phone. Then you wait, as your customer does.

When the exercise ends in a decision, the decision needs an owner and a next milestone, or it is one more shirt printed before the game. The one-page Priority Scoreboard is free at alinement.com/brief/tools/priority-scoreboard. Put the change on it and update it weekly.

One last thing. If the reason you hear is speed, nothing your competitor has is out of your reach. What they have is a shorter path from the customer’s question to an answer. You can shorten yours.

Terry

When you last lost a deal to a new, up-and-coming competitor, what did the customer say was the reason? Share your thoughts.

P.S. Next week: how to run Q4 like it’s the whole year. Close Q3 in one sitting, then run the thirteen weeks across two pages.