Attracting competitor's customers

[cocoy]

Attracting competitor's customers.

Say you're using a particular service or supplier for your business from company A. One day Company B comes along and offers a similar product. What would it take for you to try out company B?

Cheaper prices which would mean more profit for you?

Promise of better customer service? Faster turn-around time/manufacturing?

You've never heard of company B and have been using company A with no problems for some time. How can B persuade you to go with them or at least try them out?

[KristineS]

If I've been using Company A for some time and it's a good relationship and I'm getting good product and good service, there probably isn't a whole lot company B could do to get me to switch. Low prices don't do much for me, because they are generally accompanied by poor service, so the money you save is usually eaten up by late orders, wrong orders and other issues.

Basically Company B would have to either A) offer me something that Company A can't or won't offer or B) wait until Company A screws up and then swoop in and offer me better service.

[billbenson]

I don't try to sell based on price. In fact I over charge. My competitors discount like crazy. I get enough business from people who don't price shop that I think I would loose money by dropping price. Just gut feel, nothing to back that up. It's b2b expensive stuff. I'm sure its industry dependent.

I take terms as much as I can. It gets me in their system and makes it easy for purchasing. If someone wants to pay credit card I jump on it though. I don't really do a very good credit check. If their web site looks good and I can't find bad payment stuff on Google I usually go for it.

I get quotes in their hand (email) while I have them on the phone if possible. Dramatically increases closure rates.

You would be surprised how often someone else in a company tries to find product info and calls me. John may be buying from my competitor at a lower price, but Betty doesn't know that.

I've seen dramatic changes in purchasing departments in recent years. They are understaffed and just want to get the order off their desk in many cases. Very few look for the best price. Engineer gives purchasing a requisition for my product and me as a contact. Purchasing calls me and buys it. Sometimes they ask for a discount. If its a large sale, I'll go from 5% to 12%. Unless an order is at least several $k I don't discount.

I've spent a lot of time streamlining the quoting and ordering process. I don't do much with customer service. Product gets delivered and works, that's as far as I go. Obviously you can't do that with a lot of products or customer bases, but its fine for me as a one man show with my product line.

So, really, the bottom line is I get them on the phone and close them. Mostly by making it easy for them. I convert a lot of customers that way. I have a national contract with the FAA that I did that way.

[huggytree]

when its a service i usually go middle of the road or higher..price isnt the main issue...if i am happy with the service that the service company is giving i stick with them...if i have an issue or problem ill try someone new out.

if its a supplier i will always take the lowest price for the same product...all my suppliers give horrible service....i have used higher prices suppliers, but found the service to be even worse than the low price guys....i would be willing to pay more for perfect service...right now below average is the best i can find, so why pay more for it...

[Spider]

It wouldn't take anything for me to try out Company B.

As long as we aren't talking about a name brand so my customers would see a difference, I would rely on my own customer service to see how good Co.B really is.

If you are in a market where you supply other companies' products or service under your own brand, having more than one provider makes a lot of business sense. Being tied to one supplier puts you in a very weak position if anything goes wrong their end. Having a second supplier to fall back on is good business.

So, Yes, Co.B - give me a quote and I'll try you out, see how you perform, even if your price is higher than I am currently paying. Maybe you have a good reason to be more expensive. Maybe I can upsell my customers.

And, if you are cheaper, we'll look at that, too. Cheaper never automatically means less quality or any other failing - cheaper can often mean more efficient, and I like more efficient.

[vangogh]

For me this is one of those questions where the answer depends on the details. How happy an I with my current supplier or service provider? What kind of a relationship do I have with them? How much of my workflow is tied into the details of what they provide?

At the same time I agree with Frederick that it makes a lot of sense to have more than one supplier or service provider. Maybe you could expand your market through different suppliers or maybe your current service provider will get too busy at times to handle a rush job.

The hard part for you is that the current supplier or service provider is a known quantity and you're the unknown. I know what quality my current supplier provides. I know how well they keep to schedule and how their service is when a problem arises. At the moment you're only a promise. A bird in the hand is worth more than two in the bush.

As a new business in the market the key is going to be to get people to try you once. That moves you from bush to hand. You become a known quantity. Years ago my father sold truck tires. He would walk into a company that had a fleet of trucks and instead of trying to get them to change where they bought their tires he would just ask them to keep his card for the day their current supplier wasn't able to deliver for whatever reason. He'd ask the company to consider him as their backup. Those companies didn't call right away, but many of them did call sooner or later. And while some of them went back to their regular supplier some would continue to be customers having tried my dad's company and finding them to be the better option.

[Business Attorney]

As vangogh said, I think it depends on many different factors. Certain types of services do not lend themselves easily to trying out a competitor. Few businesses could easily sample the services of another accountant, for example. As long as they are satisfied with the price and services, therefore, it would take a lot for them to switch.

Other services, on the other hand, may be readily parceled out. For example, in our business it would be fairly easy to try another document copying service. WE would just send them the next box of discovery documents that needed copying.

Still others fall in between. Coffee services, for example, often own the coffee machines in offices and it violates your contract terms if you get your coffee somewhere else. If you respect the contract, it is a real hassle to try another coffee service.

[cocoy]

Funny. I though about this thread today.

A new customer is now going to start using me...if she's happy with my work. I just met her today.

She has been calling her regular provider (my main competitor) for the past few days and the person never called back. That same week she got one of my mailers, so she decided to give call me.

[vangogh]

That's kind of what I was describing with the story about my dad. Sometimes you're best bet is to let them know you're there for that one time they need you. Then make sure to over deliver and you probably have a new customer.

[Paul Elliott]

As a business owner, I might give supplier B one or several items without a complete switch from my customary supplier, A. That way I could assess the 2 side-by-side.

Paul