Attacking a well-established supplier

It is rare for a small business owner to be selling products/services in a sector where their prospects are looking to buy these items for the first time.  At the start of the sales process, these prospects will usually be buying from a competitor.  You are in the situation where every successful “new business” sale involves persuading one of your competitors’ clients to switch their supplier – and start buying from you instead.

If your competitor is a large company, doing a reasonable job and has been a long-term well-established supplier to your prospect, you will find it difficult to persuade them to simply switch all their business to you.  The risks of doing so for your prospect are just too high. 

Of course, your competitor may have struggled to meet the expectations of your prospect.  In this case, your prospect is now totally fed up with them as a supplier and is considering switching to a new supplier.  In this scenario, 100% of the prospect’s business will be available but it might not be the best strategy for you to try to win the whole contract.  This scenario represents a major sales opportunity, expect there to be intense competition because all your main (large) competitors will want to be in consideration.  You may spend lots of time and money chasing the opportunity only to see one of your large competitors winning.  This happens frequently – your small size was a disadvantage and the larger competitor appeared a “safer option”.

So what do you do?

Assuming you are not the dominant supplier in the sector (in which case you should start by aiming for 100% of your prospect’s business) you should consider chasing a modest-sized trial order, to get a small foothold.  This is a much lower-risk strategy for your prospect and you can build a persuasive case for them having a second (back up) supplier.  With just a small trial order, you elevate your company to “existing supplier” status and this will help you to meet with other key contacts and grow your levels of business bit by bit.

The justification for having a second supplier can be built around the benefit of having a backup supplier who can step in should an emergency arise with the primary supplier.  Having a secondary supplier that is already delivering in a modest way means they can ramp up far faster than it would take to find an alternative supplier from scratch when the emergency arises.  It also keeps the primary supplier on its toes.

This proposition can be developed into a highly persuasive argument which should tempt your prospect to give you a trial.  This is all you need to get inside the organisation, make contact with more of the influencers and learn more about their primary supplier’s performance.  You then tick-over, doing everything that is asked of you, exceeding expectations, until an opportunity arises to take a larger slice of the business.

For your prospect, this is a much lower risk strategy than simply switching from their current supplier to you.

If you are trying to get a foothold into a large organisation, you might even achieve this without the primary supplier noticing.  If you can get in under the radar like this, you can put severe pressure of the primary supplier by delivering a top-notch service.

If the prospect already has multiple suppliers, the good news is that they clearly appreciate the value of having a choice of supplier, working with and familiar with their business.  In this situation, it takes longer to secure your first trial order and often means waiting patiently until one of the more marginal suppliers unexpectedly slips up.

When you do get the opportunity, you must exploit it by doing whatever it takes to meet (and if possible, exceed) your prospect’s expectations.

 ACTION IDEAS

  1. Identify any prospects in which a strong competitor has meant you have been unable to replace them as the sole supplier.
  2. Develop a dialogue with them about you becoming their backup or secondary supplier.  Outline the benefits of having a small trial order to prove your company.
  3. Once you become a new supplier, look for other small orders (perhaps ones that are too small for the primary supplier to handle).  Do an outstanding job at fulfilling every order you receive.

 

Posted in Sales / Business Growth