All marketplaces have slimy competitors. They acquire prospects in dubious ways, spread lies about the competition, misrepresent products and bully prospects to buy. In the short term, they may have an advantage. But over the long term, their scummy tactics almost always backfire.
Doubt my words? Here's a true case in point.
Producer/Advisor Sales Services* (PASS) was launched this past spring to provide services to financial advisors and their prospective clients. It started by building a huge database of financial providers. Next, it deployed this database on a site designed to help consumers learn more about individual advisors. When consumers requested information, a PASS representative would contact the advisor and request a fee for giving the prospect the information, as well as an annual membership charge.
Now here comes the slime. If the advisor refused to pay, PASS accused the advisor of not being committed to full transparency. He then threatened to warn the consumer in writing that this could be indicative of something serious hiding in their background.
If the advisor still refused, a firm representative made good on the threat. In its sales conversations, the firm also spread lies about who they deemed competitors.
What happened next? One advisor immediately filed a formal complaint with his state attorney general alleging extortion by strong-arm tactics. Then, one of the leading trade publications ran a stinging exposé of PASS sales practices. The article featured quotes from advisors who had experienced the PASS gambit firsthand, and expressed their outrage.
Think about this for a minute. PASS zeroed in on the advisor's most precious asset: his or her reputation. However, by threatening to slime that asset, it unwittingly triggered wrath among those it most wanted to attract.
The company did its best to respond to the charges, but the damage was done. The exposé will no doubt replicate virally on the Internet like scum on a fetid pond. Result: The new firm's reputation has been critically tarnished.
So, what's the lesson here? For one thing, shake-down selling is no way to build a business. In addition, any high-pressure sales ploys, pretense promotions, scare tactics, broad misstatements, slander and its actionable cousin, libel, all have a way of blackening one's image.
The alternative? Avoid competitor bashing and prospect coercion at all costs. No matter what your competitors throw at you, always:
- Stay positive. Acknowledge your competitor's strengths and refuse to get drawn into any mudslinging.
- Stay accurate. Make comparisons with competitors based only on fact, not innuendo or falsehoods.
- Stay objective. Never, ever warn a prospect about doing business with a competitor. Use appeals to reason in your sales approach, not fear-mongering.
At the end of the day, you can't win by playing dirty. But if you compete hard and fair in a gleaming white suit, you'll win a lot of fans. I have a feeling PASS is changing its dress code as we speak.
* Name has been changed.