Why Do Customers Choose My Competitors Instead of Me?

00:00 — Introduction

Announcer: You’re listening to Underestimated, the podcast that helps overwhelmed small business owners turn their size into their unfair advantage so they can grow without burning out. Now, here’s your host, Shawna Suckow.

00:14 — Why Customers Choose the Competition

Shawna: Lost a decent-sized chunk of business to a competitor and you just can’t figure out why that happened? Or maybe it’s something that you keep seeing over and over again, and you’re just—why? Why do they keep choosing the competition instead of me? I’ve got everything on paper.

If that’s the case with you and you’re feeling frustrated, this episode is for you.

00:40 — The Keynote Shawna Lost After COVID

I want to start with a story about my first live speaking engagement after COVID. I was hired for a fraction of my usual fee, but I was grateful to have it because all conferences shut down during COVID, and it was months without any work.

I took this speaking engagement and spoke at a credit union conference. I do a lot of credit union business because they are underdogs, and I love helping underdogs compete against bigger entities like banks.

While I was there, the keynoter—I wasn’t hired as the keynote; I was hired as a breakout speaker—practically gave my content as his keynote address. It’s not that he plagiarized. It’s just that he had a lot of the same concepts that were framed differently. I thought, “Why did they not choose me?”

I’ll tell you what I found out later in this episode about why they didn’t choose me. In my line of work, it’s always evident who I lost to because I can look at the conference agenda leading up to the conference, or just after it, and see who they hired because they’re promoting who they chose. That can be a little painful and a little ego-damaging, but it always gives me information that I can use.

02:10 — A Lost Sale Is Not Always About Price

Let’s dive into why you may be losing to your competition. Most of us as small businesses feel like, “Well, if I lost to a competitor, they must have a better price.” That is not always the case. In fact, it is only one of maybe five or six reasons why you might have lost to a competitor, and we won’t know unless we examine all of those reasons.

The good news about all of the reasons I’m going to give you is they’re all fixable.

02:53 — Perception of Risk

Let’s start with number one: perception of risk. If they didn’t go with you and instead went with a larger competitor, that competitor may have made them feel safer. What if you’re a small business? What if you don’t have the staff? What if you can’t deliver on time? There are any number of factors, and they may feel like going with the big-name company is safer.

Yeah, that sucks, but it is a reality. We’ll talk about how to address it, but that is absolutely one of the reasons why you might lose business.

03:32 — Visibility and Memorability

Number two is an easy one: visibility, or lack of visibility. They either didn’t know that you existed, or they forgot that they knew you existed. This is more of a visibility issue, and that can easily be fixed with your marketing.

The first one was more of a trust issue. The second is more about visibility and becoming memorable.

03:59 — Buying Friction

The number three reason why you might be losing business to competitors: their process was more frictionless. They were just easier to do business with. This requires examining your process and, quite likely, asking the customer who didn’t choose you why not.

With any of these, it’s always good to ask your lost customer—if they will respond and if they’ll be honest with you—why they didn’t go with you. Getting that answer is all in framing the question the right way.

One thing I’ve found is that if I lose a piece of business and ask the client why they didn’t choose me, I don’t often get an answer. But if I have my coworker ask that same person, it removes the personal feel of it. It’s just, “Hey, we’re asking for future use. Can you let us know why you went with this person, or why you didn’t go with Shawna?” Asking that question can give you a lot of useful information. Maybe their process was simply easier.

05:19 — The Social Proof Gap

The next reason is one of the reasons why I lost that key piece of business—that keynote right after COVID. There was a gap in my social proof. The speaker they went with had a background with Disney. That carries a lot of weight and a lot of social proof.

This was five-plus years ago, and I didn’t have as much social proof as I do now. They had a ton. A lack of social proof means, in particular, a lack of testimonials from happy customers—and not just written ones, because written testimonials aren’t as trusted.

Remember that first one, perception of risk? That was all about trust. Video testimonials come out of your customer’s mouth. They’re not rehearsed, not scripted, and not perfectly lit—just recorded on your phone at the moment of their peak level of happiness.

For me, that means the moment I come offstage. If my client comes up and says, “Oh my gosh, that was amazing,” or somebody in the audience says, “You made me think about this differently. I’m going to try this thing,” that’s when I ask. I’ve put it in my brain as a trigger: “Would you mind repeating that into my phone?”

Almost everybody says yes. I think I’ve had maybe two people say no in 10 or 15 years. If they are truly happy and you’ve delivered value to them, they’re very likely to say yes. In fact, when they know you’re recording, they often gush even more about how great you were because they know they’re doing something helpful for you. They try to convey that as much as possible to people like them.

Gather that social proof and put it on your website. I would have a whole page dedicated to social proof, “what they say,” happy customers—whatever you call it. I would also drip those out occasionally on social media in a humble way: “Oh my gosh, this made us feel so good when this customer said this.” Then drop that video.

07:46 — Why the Status Quo Keeps Winning

The next one is inertia—the couch effect. Everybody uses them, and the status quo is easy. It’s easy to go with who everybody else uses. If they’re new in their job, it’s easier to go with who their predecessor used. It’s just easier.

This also goes along with safety and trust, but you are fighting against inertia and the threat of change. You need to combat this with reassurance that the change is worth it.

I would hit this face-on by saying, “If you’re thinking about going with the same old huge supplier or huge company, here’s why you may want to rethink that this year.” Hit it straight on, because authenticity and directness build trust today.

Also get testimonials from customers and plant that seed. Ask, “Were you thinking about going with a bigger competitor? Would you mention why you didn’t in this testimonial you’re about to give me?” That will help like-minded people get more comfortable breaking out of that habit and inertia.

09:12 — What to Ask After You Lose the Business

Next, let’s talk about how you find out why they chose your competitor over you. The other thing we haven’t talked about is that maybe they chose to do nothing. They chose not to act at all, which is the ultimate form of inertia.

I’ve mentioned it already: ask. Seriously, just ask. Have a post-loss conversation. Most business owners never do this. They just let customers go off into the sunset with their competitor and never bother to ask.

Very often, if you ask—or if your colleague or even an intern asks—you can get an answer: “Hey, we’re just closing up loose ends. Can you respond with even one sentence about why you didn’t choose us?” Make it easy and frictionless for them to respond, and very likely many of them will.

The second thing is to ask the customers who did choose you: “Why you and not your competitors?” Reverse-engineer that conversation. If you can do this during a testimonial, even better. Ask, “Who else were you considering before you decided to work with us?” They’ll tell you. Then ask, “Why us? Why did you choose us? Just curious.” You can get fantastic intel from that simple question.

10:48 — Competitor Reviews and Mystery Shopping

The next way to do a little reverse-engineering is to go to your competitors’ websites and read their reviews. Their three-star, two-star, and one-star reviews are very insightful about how you might be able to win customers from them. Their five-star reviews may also give you insight into what they’re doing especially well that you can improve upon.

The next one is to mystery shop your own business. If you’re a solopreneur, it’s kind of hard to do. It’s hard to fool you by bringing in somebody you know. But if you have a process, ask people to mystery shop. Find friends of friends, or people whose names and faces you don’t recognize, and have them mystery shop you.

How easy was it to do business with you? Where did they see gaps? Very often, friends of friends will do this for free. If not, this is seriously a $25 gift card to a restaurant or retail outlet, and you’ll get great intel from it.

12:00 — Using a Guarantee to Lower Risk

Let’s talk about how to address some of those risks. The first was that perception of risk—why they might have gone with a bigger competitor. Use a guarantee, a no-questions-asked guarantee.

You may think, “Oh, that’s risky,” but it reassures people and increases your level of trust. With a no-questions-asked, money-back guarantee, very rarely do people actually take advantage of it. If you trust that your product or service is as good as you think it is and as good as you sell it to be, then a guarantee should not be harmful. It will almost always do more benefit than harm by reassuring those customers.

Also check whether your competitors offer some sort of guarantee. If they do and you don’t, that is a key reason why they are less risky. If they don’t and you do, that hands-down builds trust that they don’t have.

13:03 — Removing Friction From the Buying Process

You could be creating friction. How can you combat it? Make sure your process is smooth. This is a mystery-shopping thing as well. Remove forms where there don’t have to be forms.

I have a form on my website if somebody wants to fill it out, but they don’t have to. I’ve seen so many speakers and consultants require a potential customer to fill out a lengthy form before they can even talk to the business. That is a killer. That is horrible friction.

You can give them the option to fill it out. They’ll give you information if they want to, or they’ll fill it out at midnight when they’re in their jammies and can’t talk to you in person. But make sure anything that makes it harder for them to do business with you is removed.

One of the most prominent things I can think of is a business that won’t put pricing on its website. I get it, because you don’t always want to have your pricing there. Maybe your pricing seriously does depend. My pricing depends: What do you want? Where am I traveling? How much customization will it take? I do need to have a conversation.

In all honesty, I could do better. I could put a range, or say, “It starts here, but don’t let this be a barrier because there are ways we can still work together if your budget doesn’t allow this.”

I often have ways that customers can reduce that fee if I’m just out of their ballpark, because there are things valuable to me that don’t cost them anything. Are they going to have a videographer? Speakers are always looking for fresh video. Will they have a professional photographer at their event? What would you be willing to lower your fee for?

Maybe share some of those in your FAQ: “If this is too much, maybe we can still do business by you doing this and giving a testimonial.” Get creative with reducing the friction wherever you can.

15:23 — What Bigger Competitors Can’t Copy

Let’s end with some things your bigger competitors can never replicate. Your bigger competitors can never know your customers, your customers’ dogs’ names, when your customers’ kids are graduating, and those personal touchpoints that make a small business truly approachable.

Small being your superpower is not just the name of my latest book, Small Is Your Superpower, available on Amazon. I firmly believe it is true because small is personal, small is trustworthy, and small is approachable today in ways that big companies so often try to replicate, but they just can’t.

Small companies can also pivot—I hate that word—but they can pivot on a dime to put together a package that works for that customer if the customer feels boxed in by a process they think you have to follow or an order they think they can’t customize.

If you are flexible, let your customers know: “If you don’t see the exact right fit for your needs, let’s talk, chat, or text.” Again, remove the friction. Give them 16 different ways to reach out with questions, customize something, or explain needs that don’t exactly fit into your box or process.

Removing all those points of friction is huge. That’s something small businesses can do that bigger competitors rarely can without layers and layers of approval—if at all.

17:16 — Every Lost Customer Is a Focus Group of One

As I wrap up, let’s reframe that lost business. Every lost customer is a focus group of one if you take advantage of it, ask the question, and do the research.

For your homework, look at the last five or 10 lost customers and reach out to them. Or find your top three to five competitors, research their reviews, and figure out what they’re winning on, what they’re really, really good at, and what they’re losing on. That is amazing intel for any small business.

17:59 — Resources and Closing

As always, check out my Vault. It’s at thebuyerinsider.com/vault, or you can look under Resources and find Vault. There are dozens of free resources just for small businesses on all sorts of topics, especially marketing, branding, and AI. You can self-serve and get so many of your questions and frustrations addressed.

There’s also the ShawnaBot, my custom GPT, which you can ask anything. It will respond as close to my voice as possible using everything I’ve taught it. Hopefully you can get answers. If not, please feel free to set up a call with me anytime. I’d be happy to have a connecting call with you and see if there’s some way I can be helpful.

Thanks again. This has been another episode of Underestimated. We’ll see you next time.

Announcer: Thanks for listening to Underestimated, hosted by Shawna Suckow. To connect with Shawna, go to thebuyerinsider.com.