Beat the Competition

We have all heard the complaint, “Competition from China is killing me” or “I can’t compete with the big box store purchasing power.”

For most business people, dealing with competition is part of their daily grind. It represents the constant battle for their customers’ dollars and patronage. Competition comes in many forms and shapes, and from a myriad of sources—sometimes from other companies selling products or services very similar to yours, other times from unexpected sources.

Most companies view their competition as another brand, product, or service. But smart leaders and organizations go broader. Competition is each and every challenge or obstacle your customers encounter that deters them from using your company’s products to help solve their problems. Competitors have one thing in common—they all want to beat you.

Having competition is actually good for business. It forces you to give your best effort. A monopoly can easily make people complacent and satisfied with mediocrity. Having a challenger right on your heels pushes you to run faster, work harder and think deeper. It drives innovation, inspires perseverance and builds team spirit. Plus, competition just makes the game more interesting and a whole lot more fun.

There is plenty to learn from the successes and failures of a worthy adversary. If they are a true threat to your success, ask what is it that they are doing that appeals more to your customer than what you are providing. And then focus more on exactly what you are in business to provide.

Never lose sight of your customer’s needs. Amazon CEO Jeff Bezos once said, “If we can keep our competitors focused on us while we stay focused on the customer, ultimately we’ll turn out all right.” If you remain focused on eliminating any obstacles your customers have to overcome, your business will turn out much more than all right.

So how can we effectively deal with competition? Here are some areas to consider when dealing with your business competitors.

First, identify who your competitors are. Determining exactly who your competition is can be fairly simple. They are companies that offer the same or similar products as you do. If their geographical market areas overlap with yours, they are competitors. If their pricing is similar to yours, they are competitors. Don’t overlook companies that offer products that are substitutes for yours, or sell accessories to your products. In general, it’s safe to say that anyone who sells anything that’s related to your offerings, either as an accessory or a replacement, is an actual or potential competitor.

Next, identify what you believe to be their strengths, weaknesses, opportunities and threats. And determine how they match against your product or service.

Additionally, consider the following:

Pricing: If their prices are known, are they higher, lower or about the same? Avoid a price war.

Cutting prices to retain customers is a game you can never win. Only the business that can tolerate the lowest margins can win, and once you drop your prices it’s difficult to increase them in the future. Cutting prices can further lead to a number of deleterious consequences, such as: Lowering the perceived value of your brand and product, risking attracting customers who only care about price, and putting you into the category of being a ‘follower’ instead of a ‘leader’ in your field.

If you are in a business where there is global business competition, you probably will not be able to be the lowest bidder. All that you can do is be sure to set your prices fairly and then find other areas in which you can excel.

Focus on Overall Value: You are in business to solve a problem for consumers. Identify your potential customer’s needs and figure out where your company has a competitive edge. For example, offering more personalized service, ability to customize a product or service to meet the customer’s needs, and being more nimble and therefore able to respond to the customer’s needs more quickly.

Edward de Bono, the physician, psychologist, author, inventor and consultant psychologist said, “Companies that solely focus on competition will die. Those that focus on value creation will thrive.” You can’t expect to hold on to every customer. Accept it and focus your energy on identifying your ideal customer and developing a plan to win your share of that niche. In choosing to attract customers who need and value your services, you will secure your market share even in the face of competition. Your competitive angle can be the reason you started your business, such as the value attached to your products/service or the difference between your products/service.

Customer Service: In this area, all businesses have the chance to outshine their competitors. Your customer service policies can make or break you. Together with the intrinsic value of your product/service, customer service defines your brand.

You can be one of the most expensive providers around, but if you have outstanding customer service, you will have continued business. By excelling in this area, you have the chance to win business away from those who are not providing such excellent service. Your customer service actions will depend on your type of business, but an example may include following up on your customers on a regular basis.

When appropriate, visit them instead of just calling. If they have an issue, address and fix it before the customer is forced to ask for help. Always return phone calls in a timely manner, and never make the customer feel that you are in a hurry to get off the phone.

Take Advantage of Competition: Don’t get too wrapped up in with competition. You need to use this process to better yourself and your company. Through effective competitive intelligence comes self-awareness and self-improvement. The better informed and educated you are on where you and your competition stand in relation to each other and the market, the better decisions you will make and the more prepared you will be for new opportunities.