“The competition is just too strong ; these incumbent firms are simply too entrenched for me to win,” said my client, a benefit agency owner bemoaning his lack of success on some recent prospecting calls.
The problem is, my client, who shall remain nameless, is totally wrong about his competition. Oh, his competition is tough, all right, extremely tough. But he — like most advisers — completely misunderstands who his real competition is.
Your real competitor that keeps you from getting the business isn’t the local firm down the street, the dominant regional player in your market, the national houses, or even the incumbent, whoever it may be.
Your real competition is always the status quo.
The power of the status quo is a fact of physics. Newton’s first law of motion states that an object at rest will remain at rest unless acted on by an unbalanced force. Like Newton’s objects, people have a natural tendency to keep on doing what they’re doing. Almost everyone resists change. In the absence of an unbalanced force, people will maintain their status quo.
You are battling a bigger benefits shop, with a bigger name and more capabilities, in an RFP finalist competition. You want the prospect to choose you over the bigger-name firm. The prospect’s status quo thinking is that the bigger firm is, by definition, better. Who usually wins this battle? Almost always the status quo.
Or you are asking an employer prospect to change advisers, to assign you the letter of record or the consulting contract. You want the prospect to disrupt the status quo. The prospect wants to maintain the status quo. And the status quo almost always wins this battle, too. (But not always — keep reading.)
If you can’t displace an incumbent, don’t blame the incumbent. You fail because you are not bringing an “unbalanced force” sufficient to move the prospect to abandon the status quo.
Beating the status quo
So, how do you beat the status quo? As I’ve written elsewhere, “To win the business, you must have a better conversation with the prospect than your competition.”
So what makes a better conversation? Here is where you must bring: Newton’s “unbalanced force,” some substantial value that your competitors can’t deliver. It might be your strategic client process, a consultative selling approach, a powerful cost-containment strategy, a consultative fee-based model in lieu of commission, or an HR technology solution. Whatever it is, the value you bring must be largely unique to your market and compelling enough to move the prospect to change the status quo.
Our agency client, Group Services, Inc. (GSI), in Bettendorf, Iowa, recently beat one of the national houses in a finalist competition for a benefit consulting contract. Not only did GSI win, they won with a proposal that was $13,000 higher than the national firm. How did GSI beat the status quo thinking that the national firm was superior and deserved the business? They brought a proprietary compliance program that their competitor didn’t offer.
In the post-ACA world, you have to be better than your competitors and deliver greater value. The status quo will always be a fierce competitor, but you can beat it and win the business with a better conversation with the prospect.
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