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:
- 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?
- 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.