It Isn’t Badmouthing Your Competitor When You Are Criticizing Their Business Practices

You know better than to slam your competitors on a sales call. It isn’t how you compete. You know that it diminishes your credibility, it looks petty and tacky. It makes it appear as if you cannot compete on your own merit, and so you are instead trying to tear your competitor down.

There are some cases when it is okay to badmouth your competitors, and this one of them.

Shining a Light On Business Practices

Imagine a company that is run by a bunch of boy scouts (or girl scouts). Not real scouts, just a bunch of guys and girls who are honest, hard working, and completely transparent. These “scouts” are out working in the marketplace competing, and some of the companies they are competing against are anything but transparent. Some of these companies have lower prices because they have a business practice that is built on collecting fees from the vendors that they use to serve their clients. They bill the client’s directly for using these vendors. But they never disclose to their clients that they collect a portion of the billing  because they fear the clients will believe that the money belongs to them.

More still, when these competitors capture money from the vendors and partners they use, they pull the profit out of the business they give these vendors and partners, causing all kinds of service failures, poor results, and ultimately, increased costs to the client. But their initial low price does allow them to win business by appearing to have a lower cost.

There is nothing illegal about what these non-transparent competitors are doing. But it is not widely known, and their clients are uniformly unaware of the practice. When a client does discover the practice, they are told that the company cannot discuss the arrangement or how much money they are making.

In one case, a client signed the nondisclosure agreement and the nontransparent competitor fired the client rather than release the details of their financial arrangement. It was a major client, and it was apparently worth more, financially anyway, not to disclose the details.

If It Is Their Business Strategy, It Is Open Game

Because this is how these competitors choose to compete, and because this is how they appear to have lower prices (even though it results in higher costs), it is fair game for the scathing criticism it deserves. It is fair—and necessary—to compete against this practice by bringing it into the open and shining the bright light of truth upon it.

The competitors, if they truly believe this is how they should be competing, should be proud to disclose what they are doing, why they are doing so, and how their clients benefit from their having done so.

It Isn’t Badmouthing

In this case, my “scouts” appear to have a higher price because of the lack of transparency around this practice. It isn’t badmouthing the competitor to disclose the practice to the dream clients they are competing for, to educate the client on the problems with the poor business practice, and to strongly criticize the practice and any competitor who chooses to practice it—whether the competitors are willing to disclose it or not.

It isn’t badmouthing your competition when their business practices hurt their clients.

This isn’t badmouthing; this is differentiating on values.

It also isn’t badmouthing your competitor to strongly differentiate yourself, your company, and your solution based upon your transparency, your honesty, and your integrity. Your honesty, your integrity, and your transparency, when they are differentiators, are perhaps the most valuable differentiators you have.

Questions

Do you have business practices that you are not willing to share with your clients? Can you be completely transparent, knowing that there is nothing your clients could ever learn about your business practices that would surprise or disappoint them?

What are the business practices of your competitors that are fundamentally and diametrically opposed to your business practices? What are the underlying beliefs that drive those business practices? How do you us those practices to define and differentiate you from your competitors, and to offer your dream clients a very specific choice about their values?

What are the differences between strongly differentiating on values and badmouthing your competitors? How much does it matter that your competitor isn’t transparent? How dependent is this strategy on showing the connection with the practice and the impact it has on the client’s results?


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Comments

comments

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  • http://lookingtobusiness.com Daniel M. Wood

    Good point Anthony.
    What is important is how you tell your customers about the bad practises.
    It is okej to tell the truth about the competition, be ready for them doing the same to you, as long as you do it in a matter that builds, not diminishes your own credibility as a vendor.

    Most salesmen don’t have this ability and should either learn it or just avoid bad mouthing for any reason.

  • http://www.betterwaystrategies.com Peter Bourke

    Disparagement for any reason is a poor choice. The biggest reason is that if you say one thing about the competitor that turns out to be untrue – you run the risk of the client discounting and being skeptical about everything else you have told them.

    The alternative – don’t disparage but we can still expose this competitors weakness by influencing the clients decision process and evaluation criteria to expose this type of business practice. In other words – coach them to look for the business practice as they evaluate every potential provider – us included. When they do – they appreciate the advice and counsel, they expose the competitors unethical practice, and you gain a significant advantage!

    • http://www.santhonyiannarino.com S. Anthony Iannarino

      I don’t think we really disagree on anything here, Peter. “Bad mouthing” is a touch of hyperbole. Disparagement isn’t the right word here.

      In the example I used, there is no question as to whether or not the competitors I am writing about are undertaking the practice (and your are correct, saying so without knowing would be a horrendous decision). Is it disparaging to suggest that are prices are higher because our competitors are charging their vendors a fee that reduces their ability to produce a better result for their clients? I can’t imagine how the competitors who undertake this practice could feel it belittles them in any way–they are the ones who have taken the decision to charge their vendors. The fact that they don’t believe that they can be transparent about it is on them.

      Your “alternative” is exactly how this should be practiced. But when you are down to the final two in a competition and your client says: “Your prices are higher than your competitors,” it would be wrong to say nothing.

      Thanks for the comments!

      Anthony



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