The one thought that has swirled around my mind ever since I started CoffeeCups Ink (apart from how do I find customers, what do I charge them, how do I deal with the taxman and where is the kettle again?!) has been how to deal with competitors.
There is an ever expanding pool of information out there and plenty of gurus, but this isn't an article about how to be cut-throat and kill off the competition. In fact if the first thing that comes to mind when thinking about your competitors is "exterminate" (Dalek voice optional) then you've landed on the wrong blog.
WHY ARE COMPETITORS VALUABLE
“The common question that gets asked in business is, ‘why?’ That’s a good question, but an equally valid question is, ‘why not?’
— JEFF BEZOS
The idea that competitors are a threat is probably one that easily comes to most business minds. Having said that few people will ever think of a competitor as an asset. We are all so afraid of losing revenue, losing face or losing our clients, that we end up losing the plot and the most valuable point of all that "competitors ARE valuable".
This point is very much true in small communities and rural areas where competitions is especially fierce and where customers, tend to be, entrenched in their buying habits and historic loyalties.
HOW ARE THEY VALUABLE
Glad you asked!
Competition drives sales!
Consider what you are selling for a minute... Now consider your market and potential clients. If your business is the sole provider of service "A" you run the risk of going stale. Your reach is in any case finite, meaning you can only ever sell "X" amount of your products to "X" amount of customers. If no other business is selling the same product, that means those customers you cannot reach are never alerted to the possibility of wanting to buy your product. It's a convoluted way of saying that your marketing efforts and your competitors marketing efforts, have a compounding effect on the consumers mind inducing the need to buy a particular product. If you accept that logic then the more competition out there, the more likely customers are to say "I want one of those..."
Competition drives change!
Everyone is afraid of change. Humans simply don't like the "Unknown"! Having said that change is good, even if it's just an intellectual excercise to begin with. I mentioned above that if you have a monopoly you end up going stale. This means simply that if you always practice Sir Alex's formula of "you don't break a winning squad", you fail to take into account the other part of human nature which is true of all of us. We are simply fickle! Humans change their minds about things a million times a day (OK a bit of an exaggeration but...). This is true of both major and routine decisions. It seems to me that our decision making falls into broad categories
- firm decisions (for example what football team we follow)
- impulsive decisions (for example whether on the way to work we'll buy a Starbucks or wait till the kettle is boiled in the office)
- complex decisions (for example which mortgage option is best)
- simple decisions (for example is it time to replace my toothbrush)
- inconsequential decisions (for example what pub are we going to tonight)
The list is not complete and certainly the factors that affect decision making are much more complex, however the point of this is to ask yourself, how many of those categories do you identify with? Now think back and ask yourself, have I ever changed my mind about a decision within each category? Chances are you change your mind all the time and so does your customer.
“You are the only one who knows what to do with your business.”
— LORD ALAN SUGAR
If you operate in a vibrant economy where your competitors are always there to remind you of their presence, chances are that you'll never forget that your customers CAN change their mind and go with someone else. This in turn drives change because it forces you to adapt and offer, better products, better prices, better service or even different ones, the point is, never stale.
Competition drives personal growth!
The truth is, we all learn from our competitors!
I am not advocating outright copying every move the competitor does. That way disaster lies. I am however strongly suggesting that to succeed in any business you need to embrace a basic function of marketing, which is competitor analysis.
By looking at, evaluating and informing yourself of what your competitors are achieving you are putting yourself in a position where you can, not only anticipate their moves, but crucially where you can learn more about your craft and become a better business person in general.
Ideas are not the exclusive property of others and a good business manager should accept that where a competitor has a great idea, there lies also a great opportunity to advance your own business.
Our competitors ideas in my view, is the ultimate arbiter of our own business decisions. Even great innovators in business have always adopted, and adapted, the ideas of others to support their own ventures.
HOW DO YOU DEAL WITH COMPETITORS
There are basically a couple of ways
you undercut everything
and in the process drive yourself up the wall and end up obsessing about what others do instead of what you do. Queue, manic episodes, bouts of stress, being unable to sustain margins, losing money/sleep/hair and not necessarily in that order, being seen by others as a cheap copycat, and other general feats of casual madness.
Thats all pretty bad, right? Correct! Undercutting means letting your competitor dictate how your business is run and that cannot be a good thing, because it firmly places them one step ahead.
you rant on Facebook (and other monomaniacal expressions of nihilism on social media and beyond)
Nothing shouts spoil sport more loudly than giving your competitor a bad review. If you're thinking that your customers appreciate being told how great you are and how bad everyone else is, think again. Time and again it has been shown that customers switch off to negative messages. Remember the old adage, "there' no such thing as bad press"? The reality behind that notion is that customers are always looking for the positives in any message. After all the act of buying anything is the ultimate expression of trust. If you are shouting from the rooftops how late your main competitor is at fulfilling orders, you run the risk of identifying to your customers how attractive their pricing is (or other equally positive messages).
What I am simply saying is that concentrating on your business is probably the most efficient use of your time. If your competitor is a fud, let them grow potatoes... Who cares?
you shut yourself in a high castle and plan the fiery destruction of every one that stands in your way (and other equally impressive world domination plots)
Don't obsess about how to put someone else out of business. No, seriously. Don't!
The time and effort you put into that, let alone the resources, could be better served by creating the next killer product that will earn you that year round holiday in the Maldives.
The eagle eyed will have noticed that my list of how to deal with competitors only contained the things you should not do. If you were wondering what CoffeeCups Ink actually does well it's really simple. We reach out to folks.
I'm probably never going to be best friends with the dozen of other businesses in my area that sell the same product as I do. That doesn't mean I'm going to be rude.
In fact I'm more than happy from time to time to syndicate their successes and even pass information about opportunities. Crazy? Well maybe...
But realistically I know where my business stands and what my strengths and limitations are. By reaching out and saying to people, "hey I can't fix that, but maybe you could", I'm losing absolutely nothing. By understanding what makes my competitors tick and what parts of their service are valued by customers, I also learn how to best place my products and I'm losing nothing. By understanding where they are weak and where things could be improved, I again also learn how to improve my services and you guessed it, I lose nothing!
“A business has to be involving, it has to be fun and it has to exercise your creative instincts.”
— RICHARD BRANSON
The question is, what are your thoughts on the subject?