How To Take Competitors' Clients - Lesson 1

How to Legally Steal Your Competitors’ Best Clients

We can thank our biggest competitors for several things.  They paid heavily to attract our perfect clients.  These clients already believe, trust, and have paid for services similar to ours. 

Ideally, what we want is the 20% of your competitors’ clients that give them 80% of the business.  The current buyers of the competitor’s services are your target, or current prospects who are about to buy or thinking about buying your competitors product.  Start making part of your marketing strategy to specifically target and appeal to people in that position of being in the process of making the decision or maybe even have somebody else’s information on their desk before they make the deal and you’re coming in with this strategy, that’s where you want to meet them.

Our goal is to break the loyalty factor of these people by rewarding them for taking action with you. 

The real gold for us are those people who have already bought from our competitors and are waiting to be stolen.  Our main goal is to break the loyalty factor of these existing clients who currently belong to our competitors.  What we’re really looking for is the 20% of our competitor's clients that give them 80% of their profits. 

The current buyer of our competitor's services is our target.  By concentrating our efforts on these people what we’re doing is acquiring the very best most lucrative buyer of all – a repeat buyers: someone who has bought two or more of the very similar thing. 

Currently, the smallest stream of future prospects is where most businesses unwisely spend all of their advertising and marketing dollars.  One way to legally steal your competitors repeat buyers are; to focus your advertising efforts on all the places where largest competitors advertise: i.e., trade magazines, yellow pages, newspapers, etc. 
Of the 100% of the money flowing business, the percentage of buyers that haven’t bought before, is less than 5% of the total revenue.  Absolutely less.  95% of the revenue that’s generated by sales is an existing client: those who either just bought or bought over the last year or the year before and has been buying for years.  That’s 95% of the money.  And we deploy most of our marketing strategies to the segment that can only contribute – if you target them – 5% of the whole industry.  So the 95% is what we want to focus on.  It’s the 95% of the money.  Now, within that 95% of the money flowing into that industry, there’s the 80/20 that add to that.  Remember, 20% of those buyers – depending on your kind of business – are spending 80% of the money.

Prove to them what we have to offer is far superior and in their best interest to do business with us.  The beauty of this scenario is that these people are proven buyers.  They are probably repeat buyers and the lifetime value of these clients is gold to our competitors.  And that gold is what we’re after.

Think strategically.  Think of incentives.  Think of irresistible offers that will lead them your way.

Think of how much money it costs to acquire a brand new client with advertising expenses, overhead, employees, etc.  They can be astronomical.    Our biggest competitors have gone through all the trouble, time, effort, and money to find qualified people, get them to raise their hand and actually make a purchasing decision.  Your competitors have saved you a fortune both in time and money. 
What can you do or say directly in marketing and advertising that would be powerful and compelling enough to steal away your biggest competitor’s best clients and prospects?

Professional business or practice owners make the same costly mistake of neglecting the largest segment of their industry’s market.  That is, their biggest competitors, client base and prospect list. 

We’ve all been doing our marketing and advertising backwards.  All of our ads have been written to focus on the wants and needs of the brand new clients new to the market place.  This segment makes up only five percent of the available market.  The real money is in the 95% of the market that we’ve all been ignoring.  The 95% of the available market belongs to our biggest competitors.

Your biggest competitors’ clients have already been converted to believing in your products or services.  Your job is to offer greater incentives than your competition.

So what we’re looking for is a way to steal those clients.  We’re looking for prospects and clients who have already made the decision to buy.  They haven’t made the purchase yet.  Now you are opening up our marketplace to a whole lot more opportunity and focusing on getting market share.

There’s more gold in those clients who have bought from a competitor, waiting to be stolen, than the small stream of future prospects that are coming.

Where can you get direct exposure to your competitor’s clients?  Look in the places where your competitors advertise: newspapers, magazines, yellow pages, direct mail, and catalogs.  If you were there too, when they’re looking at their ad, you’re right next to them.  You’re going to create a competitive advantage that is designed to lure your competitor’s best clients.

Use the model that banks use.  The turnover rate for a bank with a client, who has only one account, either a savings or a checking account, but just one account, is something like 96%.  It’s almost 100% a year.  Those clients don’t stay.  But the more accounts that they have, a loan, a savings, a CD, the longer they stay.  And I think the critical number for a bank is like 3, 3 accounts.  And 3 accounts, I think, is something like 5 years that a person normally stays. 

An emotional purchase is when a client calls the company and the company sends them out a sales letter with product samples.  That is an emotional purchase.  The client is deeper emotionally.  The key critical one is when they get to a quote.  Other than the sale, that’s probably the biggest emotional purchase. 

Previous buyers versus new buyers generate 80% of all revenue?  The marketing cost is too high to acquire first-time buyers, generally, for products.  Now you understand what you’re really competing with.  But we write everything to the 5% brand-new guy, brand-new prospect, and first time in.  There isn’t a single solitary incentive in there for the person who’s already a client to switch over.  That’s what this is: switched sales.

Whoever owns their market or controls their market, are the ones that play both sides of that coin.  They take their client share and then they add enough value to their existing relationships that they retain their existing clients.

Then they saw it was too much trouble.  Then they told you to take the front cover or a particular page and fax it to them.  And that action earned you the competitive upgrade, the discount, the rebate, the trade-in, whatever it was.  It earned it for you.  But what it did for you, as a person selling the product, it proved to you that you had one of those people that resides in that pool of 95% of the money flowing out, that you are now stealing.  And it’s proof of the fact. 

We want to make them feel good, like what we’re doing is selling them benefits of being one of their readers.  The headline becomes, “For trade association newsletter readers only.”  Then you tell them what to do. The association wouldn’t object to that, because it would prove to be a benefit of being a member. We just wanted somebody to know that we were getting qualified people.
An example would be -- because of your professional affiliation with the XYZ association, we are rewarding you with an instant $500 towards any of our deluxe models.  Simply bring in your association membership card to redeem your instant discount.

Okay, newsletter cover, magazine subscriber could be one –- ideally, the front page.  If you know a certain magazine, most of them all have the mailing address on the front.  The beauty about using that is when they fax it, you obtain their name, address and everything, company name, title. 

The tool that we’re describing of stealing 95% is where not only is 95% of the money flowing into an industry this year, it’s where all the backend revenue’s going to flow in next year and the year after. 

You’re asking somebody not only to buy from you, but also to switch and give up somebody else and give up a relationship, give up trust, give up everything. 
So besides illustrating and showing superiority, you can also think of doing comparisons.  Comparisons to where they are, what the differentiation is, and how more valuable that is.  Make sure you utilize your competitive advantage to explain it very clearly.  You want to show low risk to them and a high benefit or a high return.  You have to prove this stuff.  If you prove all of these unequivocally, and you have the upgrade or trade-in or discount program or rebate program in place, you can prove all this beyond a shadow of a doubt.  You will succeed. 

Another consideration is price. You know your competitor’s price and realize that at the moment you’re going out with this deal, people, in their minds, are comparing what you’re offering to the competitor’s price.  That is the first basis of comparison they’re using in their judgment.  Prepare a price/value comparison.

Every time they make an emotional step: i.e., collect brochures, sales material, quotes, or consultations, they’re a little bit closer to a sale.  And it proves that they’re serious, that they are one of the 95% that you’re trying to get.

Again, we’re going only after those clients who already believe and have purchased a product or service similar to yours.  A plastic surgeon could advertise if you’ve ever had a surgical procedure preformed or had a consultation with another doctor, all us immediately we have a special offer just for you. 

The people who already believe in the benefits of plastic surgery have already identified themselves.  There is no need to waste valuable time and money trying to convince people who aren’t interested in what you’re selling.

The largest pools of existing clients are those that have become your largest competitor’s clients.  These people are already proven buyers.  We’re looking for ways to legally steal these clients.  We’re looking for prospects and clients who have already made the emotional decision to purchase. 

In order to out-strategize your competitors, you must and should create marketing and advertising campaign that creates a strategy that plays upon the dissatisfaction level of these clients.  These clients and prospects who belong to your competitors will have to be educated by your marketing and advertising campaigns. 

You’ll have to offer something truly compelling and above all irresistible.  You simply can’t make offers to your competitor’s clients that are exactly what they already have.  They aren’t likely to purchase an identical item or service from a new supplier.

Once you’ve successfully stolen your competitor’s best clients, it’s vital to your business that you establish a multiple sales cycle with these clients just like banks.  Banks try to establish successful relationships with their clients by trying to open multiple accounts with that bank: i.e., checking, savings, home loan, auto loan, CD’s, money market accounts, etc.  The turn over rate is much less and clients who have multiple accounts with a bank are truly gold mines to these banks.  Consider these examples as a strategy for your business. 

You must create a deep relationship with these clients.  It should be one that creates such loyalty that they would never consider going back to your competitors. 

These prospects have already made the emotional decision to begin the buying process.  You’re simply rewarding them for their decision to take action. 
This is a prime example for yellow page advertisement; you could say directly in your ad, “If you have received a quote from any of our competitors, show us proof via fax or e-mail and it’s worth an immediate 20% discount at our establishment of business.”  By the time your competitors catch on, if they ever do, you’re already way ahead of them in the game.  By that time you’ll already have gained an incredibly huge competitive advantage over your entire market place.  If you’re truly committed to innovation, you’ll always be ahead of your competitors.

Here’s another example; “If you currently own an XYZ Widget, you immediately qualify for an instant $500 for our deluxe service or product.”  Again, reward and steal them from your competitors.  This could also work by having them show you a purchase invoice, receipt, or competitor’s brochure.  

Here’s another example; you could have your competitor’s best client’s fax in the front cover of their industry’s newsletter or trade magazine or association or chamber newsletter.  Again, you’re rewarding prospects for belonging to an association, trade group or chamber.  Doing this action gives them a competitive upgrade, discount, rebate, or free consultation.  You could also say, “If you are an association member, or chamber member you qualify for our special discount or incentive.”  This does two very important things for the prospects and the association or trade group.  The association gets the added good will for having arranged a discount for them with your company and the prospect gets rewarded for being an industry association member or chamber member. 

You could express it as an entitlement to a professional, courtesy discount, just for being an association or industry member.

This is strategic marketing.  You are essentially having your competitors best clients and prospects identify themselves by showing you proof of their qualification.  This way you’re not wasting your time or an employee’s time on unqualified prospects.    

What a great way to instantly capture your competitor’s best client’s name, address, and position.  You have it all right there for your database. 

You can also use the rebate method that if they are an association or chamber member or part of the industry trade group they get $500 or $1000 back in the mail when they purchase your product or service.

When legally stealing your competitor’s best clients or prospects, you need to show and illustrate solid superiority over where they’re leaving (your competitors) to where they’re going (your company).  Do comparisons of your superior quality, service.  Prove your claims -- low risk high return.  Give them every reason to go with your company and prove all of these beyond a shadow of a doubt. 

Don’t forget that the $500 rebate or special incentive you’re offering is only a one-time cost to your business.  The lifetime value of acquiring that client could easily be worth tens of thousands of dollars to your business.  Your businesses future and growth rate is at stake. 

A great way to test is to have all of your justification tools in place; such as, sales letters, brochures, advertising and marketing campaigns.  You can easily test them out with independent outside sources.

Would your offer or ethical bribe be irresistible enough to legally steal business away from your largest competitor?

One of the most brilliant campaigns by a company that realized this years ago was by the company that owned Quark software.  Their major competitor was PageMaker software who literally owned the market.

They realized that their strategy and offer had to be centered on the concept of stealing PageMaker’s clients.  So what did they do?  Their campaigns were specifically aimed at users of PageMaker software, and their offer was structured around successfully stealing PageMaker’s clients.

Instead of paying the full $695 to get Quark, they had a PageMaker Competitive Upgrade Offer.  If you faxed or sent in a copy of the front page of your PageMaker manual, Quark would give you their software for $295.  Not only did they steal PageMaker’s clients, they also got the back-end product upgrade sales for years.

The reason we are pointing this out is that after finishing the ReacherMatrix process, if you do not have the right strategy and offer in place, you will still not get outstanding results.

Question¨ What does the last chart look like for your product or service, and base on that…do you really have the right strategy and offer in place?  Quark’s strategy was brilliant because it not only stole clients at a $295 price, but it also got all new first time users in the market at the $695 price.

The reason that an integrated marketing campaign works well in this kind of situation, and why PR really facilitates the process is because it is nearly impossible to steal another’s clients without credibility that is at least equal to or greater than the product and personal credibility of the competitor that you are trying to knock off.