Business owners frequently consider their competition as the enemy.
Many focus on “beating the other guy” because that’s how they measure their
success—just like in sports, where one side has to beat the other to win.
However, by focusing on beating the competition, you will divert yourself from
your real objectives: increasing profits, gaining more time and gaining more
yourself and your business, regardless of the competition.
You can use your competition to further your own prosperity.
Let’s look at how this can be done.
Phase 1: Face Your Competition
The first step in prospering because of competition is to identify and analyze the “Real Competition.” It’s frequently not readily apparent.
Sure, your business might have new and unique products or services, but when
the needs they actually fulfill are defined, you’ll discover that many other
types of products and/or services fulfill similar (if not the same) ones.
The second step is to evaluate your competition thoroughly—to
know more about them than they or your potential customers do. You gain
considerable knowledge and power by doing this, which you will be able to use
during the next step.
Phase 2: Embrace Your Competition
That’s right! In fact, you want and need competition. Here are several of the reasons why:
Your potential customers need to compare. They need to compare your business and your products and/or services to someone or something in order to see and feel that your products and/or services provide the best deal for them. Everything is relative, and comparison in buying is a very natural thing.
You need your competition as a place to send unwanted customers.
That is...
- You need to avoid and/or get relief from bad customer experiences. You quite often spend too much time, money, and effort on extremely demanding, very price conscious, “unappeasable” customers, who usually produce no profits and sometimes create losses. Even worse, they distract you from your best customers, who drift away in silence.
- You might as well let your competitors enjoy these problem people. Let your competitors deal with these unwanted troubling customers so they will overlook the better ones—who might seek you out.
- You show strength to customers when you don’t fear competition. Many potential customers will try to threaten you and your business with “The Competition” as a negotiating tactic. Your confident understanding of your competitors and of your desirable customers will allow you to educate them to the real differences. This is how you can position your business favorably.
You need to be pushed to improve continually.
Monopolies create terrible consequences. Competition creates a desire to keep
getting better. By not improving, a business is not standing still—in reality
it’s declining toward its demise.
Your competitors will frequently teach you new ways to succeed.
You will want to execute very profitable programs that follow similar, if not
identical, programs previously instituted successfully by competitors. Does the
term “re-engineering” sound familiar? Japanese automakers dissected American
and European cars then took the best features and combined them into very
desirable products that filled many needs the other automakers failed to
provide.
Your competitors will frequently supply you business opportunities.
They may choose to ignore your potential customers or interact offensively with
them, or they may be incapable of providing the benefits that your customers
want.
Competitors will frequently open up markets that did not exist before.
When they open up new markets to sell the same type of products you do, you and your business can follow right on in and prosper. Sound silly? Look how fast
food restaurants feed off each other by congregating in certain areas, making
it very easy for customers to pick from a number of choices.
Phase 3: Position your business to provide a desirable comparison.
Establish your business so it will be much more desirable to your target customers, when they compare you to your competitors. Use the
knowledge gained in the above steps to create a comparative edge in as many
ways as possible. Encourage your customers to compare, especially in the areas
where you have the favorable edge. This allows them to make a confident
decision to buy from your business because you appear to be better for them
than your competitors are.
Examples of how businesses thrive because of their competition.
One couple, for example, started a cleaning business in the face of an
overabundance of competitors and greatly prospered, even with higher prices.
They succeeded because they were the only business to answer the phone quickly with a live friendly person to tend to customer requests immediately. Their
competition actually drove excellent customers to them.
In another case, a development group created an extremely profitable new ski
resort by concentrating on providing warm, courteous, and ever-increasing benefits to their skiers. The existing ski areas considered themselves the “only game in town” and were more focused on treating their directors as semi-royalty, while they virtually ignored their paying customers. The developers of the new resort feasted on the monopoly the others thought they
had.
Conclusion
By using your competition, and what you learn from them, you can prosper because you focus on improving your business and not on beating your competition.
Succeeding at business is not a Zero Sum Game. Your competitors do not have to
lose for you to win. You will win more often than not by using your competition
to your unique advantage.
By Bill Dueease
President, The Coach Connection http://www.findyourcoach.com
