Here are your choices:
- Strategy #1: Hold your peace. Commenting on a competitor makes you look small and petty. Thus, it's best to maintain a respectful silence and refuse to comment.
- Strategy #2: Be Entirely Honest. Once the prospect knows what YOU know, he'll thank for your honesty. You owe it to the prospect to keep him from making a bad decision.
- Strategy #3: Plant a Landmine. Ask a question or two that, when answered by the competitor, might cause the customer to see the competitor's offering in a different light.
- Strategy #4: Stall for Time. The competition may already have a lock on the deal, so your best bet is to keep the conversation going until you figure out what's really going on.
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The best answer is Strategy #3: Plant a Landmine.
The challenge here is that you have knowledge that the prospect really does need to know, but you're in a situation where sharing that knowledge outright is politically unpalatable.
If you do nothing (Strategy #1), you're potentially screwing the prospect, because he could end up buying from that competitor.
If you rubbish the competition (Strategy #2), you'll probably lose the sale, because that really does make you look like a jerk.
If you stall for time (Strategy #3), you're just putting off the inevitable, because you're going to have to get do something, sooner or later.
So what you do is ask some questions that attempt to reframe the competition's offerings in a different light. Ideally, you do this in a way that causes the prospect to independently come to the conclusion that the competitor's products aren't appropriate.
For example, suppose you know that the competitive product experiences a much-larger-than-average down time at 5% of their sites.
Rather than saying something like "Their product is always crashing," ask something like "How important to you is 24/7 uptime?"
When the answer is "very important", say: "then you'll want to check the uptime performance of any products that you consider." (So far this is basic selling.)
Now comes the landmine part...
Say something like: "When you're talking to vendors, be sure that they don't try to pawn off their 'average uptime' as being their real uptime. Some vendors have a few problem sites that are responsible for 99% of their downtime. The last thing you want is to be one of those sites."
Tick, tick, tick, tick, tick...
Next time the competitive sales rep comes in, the prospect will ask about uptime and the rep will start talking about average uptime. Ka-boom! That rep just lost all credibility and you're back on top.
Needless to say, you can only do this if you're really strong in the competitive intelligence arena. But if you know your stuff, there's no competitive technique that's more effective.