How to Answer "Who is Your Competition?"

Years ago I was the COO of a technology firm and was responsible for buying a new security system. I didn’t know the security market very well so I did a little research and without much effort had an eager sales rep sitting in front of me within about 48 hours. Among other questions I asked him was, “Who are your chief competitors?” He rattled of three specific companies. After the meeting I set appointments with each of them and ultimately purchased a solution from one of the three that he mentioned.

So where did this seller go wrong? Is it incorrect to name your competitors? After all, that’s exactly what I asked him. He just gave me an honest and straightforward answer. But it cost him the business. That one question was his deal breaker. How could he have answered it differently? How should you answer that question?

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First, don’t answer the question by rattling off a list of companies. Don’t ever, ever do that. Instead, say something like, “There are a number of companies in our space. I’m sure that you have heard of many of them. But none of them do exactly what we do, so it’s really hard to say.” That statement should not be a stretch. Your competitors don’t do exactly what you do. You have additional services, better customer support, more flexible payment terms, more locations, a better distribution system, an ISO 9000 certified facility, safer drivers, more automation, and many other things that differentiate you from your competitors. If you don’t have that short list of key differentiators get one – fast!

I also like another, more straightforward approach like, “We don’t talk about our competitors. If you have specific questions about how our products are different I would love to speak to those.” Very powerful answer. In this instance you are stating it more like company policy. Your prospect should appreciate that.

And, whatever you do, never ever bash your competitors. It’s a low class thing to do and your prospect will not appreciate it one single bit. It speaks poorly of you and your company and may cause them to question your integrity.

Personally, I was being a lazy buyer when I asked the security system rep who his competitors were. I didn’t really know the market. And his answer cost him the business. Maybe your buyer is just being lazy too. Why give your competitor an edge by mentioning their name?

So when you get that age-old question, “So, tell me, who is your competition?” no matter what, no matter how uncomfortable you get, do not ever give a prospect a short-list of your competitors. It could cost you the business.