How To Get Your Head Out Of Your… (on competition and winning!)

in On Entrepreneurship

…you think I’m going to say ###, don’t ya?

Not this time.

This post is about getting your head out of your competition’s ###. grin

Let me explain…

Most small business owners fret and fear over “the competition.” I saw this recently in a retail shop in Kentucky. My client’s name is Claire, and before she even opened her doors, a competitor-to-be (I’ll call him Jack) a few miles down the road was throwing fits to anyone and everyone who would listen.

It was unfair she opened a store so close to his. The vendors who sold to him should refuse to sell to her. It was unethical for people to think of doing business with Clair when they had been Jack’s customers for so long. The whines and cries went on and on.

After the doors opened, we caught Jack trying three “covert espionage” tricks to find out what Clair was up to and to make things more difficult for her.

Jack is an extreme example. But I see businesses overreact to “the competition” all the time.

What should you do instead?

There are three basic guidelines to successfully operate in a competitive environment.

First, you do need to be aware of what is happening in your market. Not only the competition, but also the vendors, media, and, most importantly, your customers.

Your business doesn’t operate in a vacuum, and sticking your head in the sand doesn’t mean things aren’t happening above ground. To pretend other people and options, situations and circumstances don’t exist is folly.

Second, sometimes you do need to respond to what the competition is doing. You can position your business as competition-free (which is possible), but that is not the same as operating in a non-competitive market.

Let me give an example of what I’m talking about.

Imagine there are two computer consultants in the same city. They have roughly the same skills and competency. One markets his skills to anyone with a computer and a checkbook, while the other markets exclusively to dental practices with 5-15 employees. Even though you and I know the skills and solutions might be the same, in the mind of a dentist, the second consultant is a specialist in his kind of business, and no real competition exists. This is a simple example of positioning a business to be competition-free, where, from the client’s perspective, you are the only one who does exactly what you do.

But what happens if a third consultant comes to town who also decides to market as a specialist to dentists?

Because all effective marketing is based on differentiation, our hero must adapt his strategy to present an additional, meaningful difference to his target market, setting him apart from the competition yet again.

The third guideline is the most important and least understood.

When the conditions in your market shift, whether it is due to the competition or something else, use the changes as an opportunity to become more meaningful and relevant to your customers.

In business, the focus of your next move should not be “getting the competition,” the attitude held by the perpetual second place finisher and folks like Jack. It should be “getting better for your customer,” the attitude held by champions and the one that’ll put the greatest profit in your pocket.

{ 4 comments… read them below or add one }

1 Anonymous April 21, 2005 at 2:04 am

Actually, I’d disagree with your consultant example. The new guy has to differentiate himself, or the second consultant will continue to clean up. Incumbency is not to be taken likely. It’s like I was reading on one of the branding blogs; Crest, as the category leader for toothpastes, markets the benefits of the category, while Colgate (and others) have to differentiate to compete.

The incumbent can continue to plug away, expounding on the benefits of using a specialist. He can write articles for the paper, speak to the local ADA chapter, etc – without having to differentiate further. His history, and longevity, make his job much easier.

Now, you’re right in saying that there’s an opportunity there – perhaps even in partnering with the new guy. A firm of two will likely be more effective than 2 solopreneurs, and may be able to expand into larger practices, or expand their geographic reach.
——-

Reply

2 Anonymous April 21, 2005 at 7:04 am

Actually, I’d disagree with your consultant example. The new guy has to differentiate himself, or the second consultant will continue to clean up. Incumbency is not to be taken likely. It’s like I was reading on one of the branding blogs; Crest, as the category leader for toothpastes, markets the benefits of the category, while Colgate (and others) have to differentiate to compete.
The incumbent can continue to plug away, expounding on the benefits of using a specialist. He can write articles for the paper, speak to the local ADA chapter, etc – without having to differentiate further. His history, and longevity, make his job much easier.
Now, you’re right in saying that there’s an opportunity there – perhaps even in partnering with the new guy. A firm of two will likely be more effective than 2 solopreneurs, and may be able to expand into larger practices, or expand their geographic reach.——-

Reply

3 Anonymous April 8, 2005 at 12:04 am

“…a competitor-to-be (I’ll call him Jack) a few miles down the road was throwing fits to anyone and everyone who would listen.

It was unfair she opened a store so close to his. The vendors who sold to him should refuse to sell to her. It was unethical for people to think of doing business with Clair when they had been Jack’s customers for so long. The whines and cries went on and on.

After the doors opened, we caught Jack trying three “covert espionage” tricks to find out what Clair was up to and to make things more difficult for her.”

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This is obviously Jack’s choice of PR and marketing campaign…until he grows up.  smile

Reply

4 Anonymous April 8, 2005 at 5:04 am

“…a competitor-to-be (I’ll call him Jack) a few miles down the road was throwing fits to anyone and everyone who would listen.
It was unfair she opened a store so close to his. The vendors who sold to him should refuse to sell to her. It was unethical for people to think of doing business with Clair when they had been Jack’s customers for so long. The whines and cries went on and on.
After the doors opened, we caught Jack trying three “covert espionage” tricks to find out what Clair was up to and to make things more difficult for her.”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This is obviously Jack’s choice of PR and marketing campaign…until he grows up. 

Reply

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