“If you want to be successful in business, you need to welcome your competition with open arms – just don’t let them walk all over you. Strike the right balance between respecting your rivals and focusing on how you can beat them, and you’ll have a winning formula,” explained Richard Branson in an entrepreneur.com blog.
This may be all well and good when you have a stable business in a reasonably small market.
However, when first starting out, existing competitors or even other “new kids on the block” can be intimidating and quite often, in an effort to penetrate the market instantaneously and corner our own segment, we take our eye off the ball and begin to be a follower rather than a leader.
- We become obsessed with tracking every action they take
- This leads to a “copycat” mentality
- We become overly preoccupied with what the competition is doing
- We panic every time they launch a new product or offer “specials” to their customers
- Depression and defeatism takes over causing us to lose sight of our own strengths and value to the market.
“Companies that are always trying to keep up with the Joneses will always be a step behind, and this can foster a culture that is, at its core, reactionary. Businesses that are reactionary forgo innovation and can quickly become irrelevant to consumers.” – Virgin.com
Keeping ahead of the Joneses and remaining a force in your market is all part of your marketing plan and it is for this reason that keeping this plan relevant, up to date and full of innovative ideas and a forward-looking vision, is essential.
Don’t let them scare the pants off you
Many entrepreneurs believe that competition is a positive – it stimulates creativity, awakens new ideas and concepts, instils a sense of financial control, requires a constant re-evaluation of your customer service charter and ensures your marketing plan is not gathering dust in the basement.
Don’t allow the competition to intimidate you or force you to become reactionary.
Their existence proves that your product or service is in demand so stay focused on your business and don’t become the grasshopper in the industry – hopping from product to product to sales specials to giveaways simply to try and maintain your market share.
Use your drone to keep an eagle eye on the competition
This does not mean you devote your days to spying on the competition.
But what it does mean is that you need to know as much about them as you can.
To begin with, you need to determine exactly what impact your competition is having on the market in general and on you specifically. Is it constant rivalry or are they a slight annoyance that generates some noise in the background but has little direct impact on your company?
The manner in which you counter the competition will depend on their influence. If you are the minnow in the industry, you have to work harder to maintain and increase your presence but if you are the “main man, or woman”, then obviously, they require less attention.
One thing you need to keep in mind – being a sole supplier in any industry may have its short-term benefits but be assured competition will be attracted, and as you are the only player, and therefore there are plenty profits to be got, they will arrive in droves.
Know your competition. Get to understand what their main focus is – are they quality driven, price players, expansionists, actively competing to eliminate competitors or content to stay in their corner.
Don’t be shy to pay them a visit and see what it is they have on offer or why all your customers have left you for them. As Richard Branson says in the Virgin article:
“By doing market research on your competitors, you can work out exactly how to provide a product or service that is superior. This is the reason that I sometimes fly on other airlines – often, great ideas are sparked when you notice a problem that a competitor faces and try to find a good solution yourself.”
Deploy your secret weapon – your customers
Once your customers understand that a single mention of the name of one of your competitors won’t get them drawn and quartered, they can be a tremendous source for that “secret sauce” you need to stay abreast of what the opposition is up to.
Talk to your customers about their experiences with “those foreigners” they do business with, but remember, it needs to be a friendly chat without recriminations or you will lose the customer.
Customers often unwittingly provide valuable information about new product releases, price discounts, new marketing strategies, and just general gossip that could be of extreme interest to your own planning.
Don’t play dirty but nothing wrong with being a bit conniving
I speak from experience when I say that the world of small business competition can become extremely cut throat at times, particularly when the economy is not doing its bit.
I have seen small corner café owners hurl more than just verbal abuse and last week’s fish and chips at one another.
That’s no reason why you should play dirty. Remain ethical and focus on the professional attributes of your ownership style and always keep in mind the image and reputation of your company in the eyes of the public.
Hopefully it won’t happen, but should you become the target of some unscrupulous, mealy mouthed and generally disreputable competitor, don’t stoop to their level by reciprocating in kind.
But that doesn’t disqualify you from firstly; letting them know, and everyone else you know, that you know what they are up to, and secondly, slipping in some comparatively mild, but still dastardly, tricks of your own.
For example, sharing in general banter with some influential friends at the local Business Chamber, or with a local reporter you just happened to find the telephone number or email address of, that you wonder how true the rumour is that your competitors latest invention blew up in the laboratory (thankfully no injuries!)
Co-existence with a competitor
There are recorded instances of this type of insanity.
Seriously though, not every competitor needs to be the opposition, try looking for cross referral opportunities.
Let’s use a silly example by way of explanation: you sell stationery but not whiteboards, your competitor also sells stationery, including whiteboards, but does not offer box files, which you do.
See where I’m going?
And finally
Give the competition the importance and time that is commensurate with their impact on your business.
Focus on what you are trying to achieve – remember that document called a Business Plan? Go back and take a look and keep the business in line with your projections and visions.
Don’t play catch-up.
Be innovative and most importantly, KNOW what it is your CUSTOMER wants and be sure to provide a timely, quality product or service, consistently.
“Companies that solely focus on competition will die. Those that focus on value creation will thrive.” – Edward de Bono
Image courtesy of Flickr by 1derwoman