Competition vs Synergy

Reflecting on Competition |

Competition amongst businesses, and people, can be energizing and productive. Competition allows us to keep our eye on the ball and consider on a regular basis what others are doing in our space to be successful. Competition can be a healthy part of your business growth.

What happens when other like-kind businesses enter the marketplace, and even <gasp> market to our own customers?

I think it is a natural inclination to react to competition by verifying and validating your value to your customer base. I would even bet that if you have experienced a competing business in your market that you went on the defensive. You drove by their shop, and even sent a “mystery shopper” inside to spy. You probably tried to find out what their “special offers” are, or what they are doing differently to stand out. You would then immediately pass of these new ideas as “fads” and “temporary.”

Here is where competition can help us. Competition should always be considered, even if there isn’t an immediate threat in your market. You should always be working to improve and win over your customer base on a constant and continual basis. What else keeps you on your toes?

As we delve deeper into our competition, I want to ask you the following:

  1. Who are your competitors? They might not be who you think they are. For example, who would have thought that your phone would be the competitor to your TV?
  2. What makes your competitor your competitor? Identifying how and why your customers use your goods or services is key.
    • Are you a one-time purchase, or something that is needed on a frequent basis?
    • How easy is it to buy a product or service from you?
    • What does the sales experience look like at your business?
    • What does your follow up time after a sale is made look like?

I hope you are using these tools on a regular basis to evaluate your business experience, and not only when the threat of competition is looming.

Let’s switch gears and talk about synergy. Like-kind businesses can also be synergistic. If you take a look around the community you live in, you will probably notice many synergistic business that are located right next door to each other. Take the home improvement industry. In most communities, there are multiple home improvement stores located on opposite corners, or within blocks of each other. Why does this happen you ask? Because of synergy. While two businesses may appear to carry the same products, more than likely if a customer can’t find what they are looking for at one home improvement store, the other one will have it. These two businesses are relying on the customer base in that community to shop at both, for different reasons. One store might offer a better supply of lumber, while the other might feature more garden items. The same can be said for the banking industry. How many high traffic intersections are home to more than one bank or credit union? What appeals to one customer base can create an appeal to a different customer base for different reasons.

What are the lessons learned here?

  • Continually evaluate your business to determine its strengths and weakness so you won’t even have to defend it to a new competitor.
  • Determine what your business does best, and create synergy with those around you. It is a-ok to be a specialist, and not be a “one stop shop.” Decide if those synergistic businesses can create a referral network for you, instead of trying to compete.

It’s About Time

The anticipation of waiting for a good thing can drive you a little nutty.  I get this way any time I plan a vacation – even more when the date is less than a month away.  I especially feel this way when no specific deadline is issued to me (like a recent comment from a sub-contractor who told me he’d have some estimates within the next week or so, and I still haven’t heard any news).

When the power of decision is out of your hands, what can you do?

You can take control and put your energy into something else.  Sir Issac Newton’s Third Law of Motion teaches us that “(f)or every action, there is an equal and opposite reaction.”  When you will something to happen (without action), your result is most likely nothing.  Taking the time to put in some action (even in another area) can work for you to first of all get your mind off of that non-eventful goal.

The power of the mind to create opportunity is limitless, but the mind doesn’t work alone.  Take the lottery, for example.  Wouldn’t it be great to receive a windfall of an enormous amount of cash that would set you up for life (or even just a little bit)?  In order to be in the running for some lottery winnings, you have to buy a ticket.  If you are focused on financial soundness and comfort, then put in some work to get there.  Take the time to review your finances, get organized and establish a game plan to pay off debt.  There is some real power you can wrap your head around.

At the beginning of this year, I wrote down some financial goals for my family.  At the time, I had no idea how I was going to accomplish them, but I got to work on them regardless.  I wanted to have a clear understanding of how money enters and leaves our household (and bank account), and what we could consider assets.  It wasn’t until a couple of months ago that an opportunity to reposition some of our finances came to light, and although we could have taken advantage of this repositioning sooner, the timing was perfect.

Take the time to put in the work, and the synergy of your efforts will pay off.