Alarms: The Auction House

While I was working in the alarm system business, I identified a big prospect in Haifa: the owner of a business (well known to this day) that runs auctions of furniture, paintings and expensive collectibles.

The sales process with him took several meetings to define the solution and negotiate.

Every time I arrived at this client's place, I'd see the car of Uri, from a company called HaManganon (a competitor, known today as Tamnun), pulling away...

I realized he was the main player I was up against.

Uri was a tough competitor, aggressive and extremely savvy. He knew every trick (the ones in the book and the ones that aren't...) and more than once he left me "bleeding"... His only weakness was the size of his company, which back then consisted of just two people: Uri and his brother...

The moment he drove off, I walked in after him, and after a bit of small talk I found myself confessing to the client, with great sincerity (a kind of "pawn sacrifice," a well-known move in sales), and explaining:

"Look, the truth is that everyone is basically selling the exact same alarms. The control panels are all made by the same manufacturer in Tel Aviv, and each company just orders them with its own logo. The detectors are all Visonic, and the sirens are identical too... Even the installation isn't complicated; any half-decent installer can do it...

"So where's the difference? Well, an alarm is a 'service-intensive' product (there's no such term! My teacher made it up...). What makes the difference is the size of the company, its service department, and its ability to handle and solve problems for lots of customers at once.

"With us, for example, there are service teams working around the clock, and they'll be at your disposal for anything that comes up. You won't have to sleep at the shop if you run into a problem..."

The client, grateful for my honesty and integrity, returned the favor: "Then I want to be straight with you too and tell you that you're not the only one in the running here. I'm also talking to a company called HaManganon. In fact, their rep was here just a few minutes ago!"

Without missing a beat, I answered, "HaManganon? Actually, they're two very nice guys..."

It's not hard to guess who got the deal.

Ten years later, when I was the marketing and sales manager at a military electronics plant, I found myself using the very same tool in a competition for an important project at Elta (a plant belonging to Israel Aerospace Industries), up against a rival plant called Optomic...

This customer needed a frequency source (an oscillator) developed at a very high frequency (microwaves). In those years Optomic was taking its first steps as a plant that developed and manufactured microwave components and subsystems, and it was willing to take on projects at any price to build itself a base of customers and orders.

It was clear to me that we couldn't win the project on price, so I went back and harnessed the "honesty that pays" method once again.

At the meeting with the customer's representative, I stated: "Everyone knows that any average engineer in the field can design a frequency source to these specs. The theory has been in the literature for many years and it's out there for anyone to read. The thing is," I added, "this spec calls for extremely low phase noise figures (-80 dBc), which require a specific and very expensive piece of measuring equipment... Our plant already bought HP measuring equipment a year ago that can measure phase noise that low..."

I said all this after making sure that Optomic didn't have an instrument like that.

I assume that the moment I left, somebody picked up the phone to Optomic to find out exactly how they planned to run the phase noise test...

What I know for certain is that we won the order for that project.

The moral:

Both of these cases show the approach that assumes we don't operate in a vacuum.

The first task was to identify who the most problematic competitors were. Then came the question of what each one's weak spot was (in the first case, size; in the second, the lack of a critical piece of measuring equipment). That, of course, takes a lot of knowledge about your competitors.

Based on those weak spots, the question of tactics came up.

In both cases there was an element of "sacrificing" some of the parameters we shared with the competition, in order to win the customer's trust and to isolate the weak spot from the overall picture.

Once the pit was dug, all that was left was to give the competitor a friendly pat on the back and tip him in.