Dear SaaStr: How Do You Steal Customers From the Leader in the Space?
First, don’t hide. Don’t run away from where they are. You have to be where your competitors are. You have to show up.
Many startups try to avoid the places their larger competitors are. They avoid the same tradeshows. They don’t sponsor the same newsletters and services.
They try to stake out their own marketing white space.
While that’s a good idea, you also usually want to be exactly where your competitors are as well. Why?
- 80%+ of customers will buy the top brand. But not 100%. Others will look for what else is out. What’s more innovative. What has a new solution to an old problem. And they will look where the top brand is. At the same events, the same podcasts, the same websites.
- You often get another chance at the deals you lose — but you have to be remembered and present. When the competition screws up, you probably will get another chance at the renewal. Or least, the next renewal. It’s enough to be the Clear #2 to get invited to a chance to steal a competitor’s customer during an unhappy renewal cycle.
- Market (carefully) to all lost deals — not just current prospects. Drop them into a low-key drip (e.g., once a month) letting them know you are still doing well. That you just closed Google as a customer. Etc. If they end up looking for a new vendor, they will reach out to you.
- Be the more enterprise choice. If you’re more secure, if you integrate with more enterprise solutions, if you do more enterprise “stuff” … let your competitor’s bigger customers know. Many many want a more enterprise solution.
- Offer a partial transition, and/or start with one group or department. If there’s one awesome feature you have the competition doesn’t, maybe encourage them to use both vendors for a while. And let the best app win over time.
- Offer buy-out deals. Offer to buy out the remaining term of a competitor’s contract with a customer. This removes some friction from moving vendors.
So if you lose a deal, consider that a challenge to get them back maybe in a year or two.
Just remember, it’s hard to steal a customer overnight. It often take years. You have to be patient, tenacious, and go long.
And don’t be scared of where your competitor is strong. Show up where their customers are. And you’ll steal a few. Many just a few at first. But a few.
A bit more here: How to Steal a Customer From the Competition | SaaStr
(note: an updated SaaStr Classic answer and vendor assessment image from here)