Let’s turn the clock back about 40 years and take a business perspective look at what was going on in the world of sales training. The early 70’s were the early years of modern day sales training. During that era five or six companies dominated the sales training industry. They competed against each other to win the major deals. Each won their fair share.
Fast forward to the present. The best of those founding companies are still around and are doing quite well. But, the business landscape has changed dramatically. Today along side these companies are a host of small entrepreneurial sales training organizations. The number of these companies has expanded significantly in the last ten years.
So here’s the question of day: Can these new, small (fewer than five people) companies compete against the market leaders and win major deals with major companies? Or are they, for the most part, relegated to small deals with small companies? Like most questions of this sort there is a wide diversity of opinion. We come down on the “yes you can” side of this question. Let’s explore some of specifics of what it takes if a small sales training company is going to successfully compete against the giants in the industry.
We’ll start by putting some “not to do’s” under the microscope:
- Don’t rip stuff off. I fortunately had the pleasure of working with one of those founding companies. One frequently occurring market phenomenon was someone ripping off the intellectual property, moving the chairs around and declaring they had created a better mousetrap. Any day of the week this is a bad idea for several reasons – it is in poor taste – it violates copyright and trademark laws, and the modified replica is never as good as the original.
- Don’t play the other guy’s game. David didn’t beat Goliath by being taller or stronger – he was faster, quicker and clearly a bit cleverer. David’s tale is a good one to recall when going up against market giants. For example, in this case a new, small sales training company is not going to win by deploying strategies related to leveraging brand image. It’s unfortunate but true that a small company lacks the time and money to develop a brand identity better than a successful organization that has been in the industry for 40 years. This one simple point has significant implications for your overall sales strategy.
- Don’t try and win by simply being cheaper. Large companies planning large sales training projects consider price as a selection criterion. But it is never the only criterion and seldom is it even the most important. So, price can’t be the big differentiator. In fact, when it comes to the world of money it is better for the small company to think in terms of how to craft innovative pricing models as opposed to quick ways to reduce price. For example, using a license-to-use versus a per/head pricing model can be appealing to the large company and very advantageous to the small sales training company.
Let’s now turn from “what not to do” to what one should do. Actually it is a lot easier to delineate the traps to avoid than to establish some positive specifics around how to get it right. Here is a starter list that might help to get started in the right direction.
- Understand the giants. This is nothing more than the old idea of understanding your competition. But when you’re David and they’re Goliath this knowledge is particularly important. In the case of sales training, the good news is you can get a good picture by knowing the information for only four or five companies. Three of the specifics to get a handle on are: strengths and weaknesses of the products, pricing models and what they view as their major differentiator. It is hard to beat a larger competitor if you don’t know how they win.
- Understand the customer decision process. You can’t sell, if you don’t know how people buy and large companies buy differently than small companies. The criteria are different and more players are involved. In general if you are just talking with the Sales Training Manager versus the VP of Sales you’ll probably lose because your larger competitors are doing just that. A fundamental “must do” is to get in early and understand and influence the decision criteria. In a majority of cases the winner is determined by half time or worse yet before the process ever starts. If it is an RFP, a small company will almost always lose to their larger competitor – so think twice about playing. Move on and spend you time elsewhere.
- Specialize. If you are a small company it’s hard to win if you are trying to be all things to all people. In the case of sales training it is better to have a relatively broad portfolio of sales training products and specialize by market segment than the other way around. Reasons include: you have a better chance of doing repeat business with existing customers; you avoid the appearance of the “one trick pony” hence emphasizing smallness, and you can more quickly develop a relevant reference list – customers want to know you understand how selling works in their industry. Here it is important to distinguish between a broad portfolio of sales training products and promoting the idea you can do training, compensation, selection etc. – the latter is not credible with large companies
- Use adjuncts and outsourcing. You can’t win if you don’t stay in business. So a small sales training company needs to be very thoughtful how they spend resources particularly when it comes to ongoing commitments. One important aspect of this idea is to use adjuncts creatively rather than hiring people. A good case in point is trainers. If you are going to compete against the larger companies you need a cadre of trainers – and they need to be really good. No set of training materials is so good they don’t require great trainers. The good news is there are lots of folks who are great sales trainers that work as adjuncts – as matter of fact the large companies use them as well. Other areas to consider are: graphics – they need to be first rate, production, and web page design.
- Develop great products. In the end it’s important to remember you have to have as good or better products than those aforementioned giants – while keeping in mind that plagiarism is not a strategy. To create great products you must know or have access to people who know in-depth at least the following three bodies of knowledge: What are the priority needs of the market, what constitutes selling success, and what does state-of-the-art instructional design look like. As a rule of thumb it probably takes a good year or two to do just the research and development work for creating the draft materials – there are no short cuts for generating creative works.
There is nothing wrong with the idea that small sales training companies should focus on small companies and small deals. In fact one can be very successful. The central point is – choice is available. Small sales training companies can win their fair share of large deals. If you deliver excellence large customers will not question the fact that you are small.
Although the focus of this article was the business development choice available to small sales training companies, it is interesting to view the shifts in the sales training industry from the customer’s perspective. There is nothing but good news. Today customers can turn to one of the founding companies in the industry and get great training. But they can also investigate the upsides of doing business with one of the new entrepreneurial sales training companies – compared to times past the number of good choices has been expanded
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©2012 Sales Horizons, LLC