How to Prosper BECAUSE of Your Competition
Business owners frequently consider their competition as the enemy. If you’ve been considering your competitors as roadblocks, or hindrances, you’ve been overlooking an important springboard to success. Many owners focus on “beating the other guy” because that’s how they measure their success—just like in sports, where one side has to beat the other to win.
The business world is NOT a Zero Sum Game. Where one business can only win by defeating another business. Instead, the real business game is like the Universe, always expanding and creating more and more room for everyone.
By focusing on using your competition versus beating them, you will be able to achieve your real growth objectives: increasing profits, gaining more time, gaining more desirable customers, and gaining more control.
The first step in prospering because of competition is to identify and analyze the “Real Competition.” It’s frequently not readily apparent. Sure, your business might have new and unique products or services, but when the needs they actually fulfill are defined, you’ll discover that many other types of products and/or services fulfill similar (if not the same) ones.
For example the real competitors to our business, The Coach Connection (TCC) are not other coaches or coach providers. Our mission is to make sure our clients will reap the incredible rewards by achieving their coachable goals quickly and completely. Life coaching is not a competitive sport. Our real competition is the overall ignorance, misunderstanding and frequent cynicism many people have about the life coaching process, and unfortunately the Life Coaching Industry.
Thus, we hurdle our real competition, “ignorance and miss information” by educating the public about the remarkable benefits of being coached, and how life coaching actually works.
Know Your Competition
The second step is to evaluate your competition thoroughly—to know more about them than they or your potential customers do. You gain considerable knowledge and power by doing this, which you will be able to use during the next step.
That’s right! In fact, you want and need competition. Here are several of the reasons why:
A. Your potential customers need to compare. They need to compare your products and/or services to someone or something in order to see and feel that your business provides the best value for them. Everything is relative, and comparison in buying is a very natural thing. Your confident understanding of your competitors will allow you to educate your desirable customers to the real differences. But do NOT lie or try to deceive in offering your comparisons, whatsoever!
For example, we provide clear and factual comparisons of coaching providers. We want our visitors to learn the truth about their choices so they can make well-informed decisions about which services are best for them.
B. You need to be pushed to continually improve. Monopolies create terrible consequences. Competition creates a desire to keep getting better. By not improving, a business is not standing still—in reality it’s declining towards its demise. Think Enron or Kodak.
C. Your competitors will frequently teach you new ways to succeed. You will want to execute very profitable programs that follow similar, if not identical, programs previously instituted successfully by competitors. Does the term “re-engineering” sound familiar? Japanese automakers dissected American and European cars then took the best features and combined them into very desirable products that filled many needs the other automakers failed to provide.
D. Your competitors will frequently supply you business opportunities. They may choose to ignore your potential customers or interact offensively with them, or they may be incapable of providing the benefits that your customers want.
For example my sheep farmer partner and I created the extremely profitable Cardrona ski resort in New Zealand by concentrating on providing warm, high quality, and ever-improving skiing experiences for our skiers. The existing government operated ski areas controlled everything, and considered themselves the “only game in town.” Their directors gave themselves exclusive special privileges, at the expense of their paying customers, which they treated as second-class necessities. We feasted on the monopoly they thought they had.
E. Competitors will frequently open up markets that did not exist before. When they open up new markets to sell the same type of products you do, your business can follow in and prosper. Sound silly? Look how Apple created whole new industries with the iPod, the iPad and the iPhone to some degree. Their competitors have prospered because Apple created new markets that did not exist. As another example, we at TCC would welcome the joint efforts by other coaches or coach providers to educate the public about life coaching.
You need a place to send mismatched and unwanted customers. Not every potential customer will be a good match for your business. You want to be able to direct potential customers to somewhere else to give them options, to avoid and/or get relief from bad customer experiences, and to show strength by understanding your competition enough to have the confidence to recommend them, when appropriate.
For example, during morning snow skiing radio reports we sometimes suggested that skiers visit other ski areas because we expected to be full at Cardrona, which would degrade their skiing experiences and that of others. During following days, we reached “Full” even quicker. More skiers came earlier. Then we had to almost plead that they visit our competitors, because we would not allow overcrowding.
Establish your business so it will be much more desirable to your target customers, when they make comparisons. Use the knowledge gained in the above steps to create a comparative edge in as many ways as possible.
Encourage your customers to compare. Especially in the areas where you have the favorable edge. Most good potential customers will compare on their own anyway. Helping them do so allows them to make a confident decision to buy from your business because you appear to be better for them than your competitors.
A. One couple started a cleaning business in the face of an overabundance of competitors and greatly prospered, even with higher prices. They succeeded because they were the only business to quickly answer the phone with a live friendly person to immediately tend to customer requests. Their competition actually drove excellent customers to them.
B. I started “The Office Outfitters” in 1992 to deliver office supplies throughout the US by specifically targeting Office Depot customers. Not only did we provide next day delivery almost any where in the US, versus 5 days for OD to much fewer areas, we had an average fill rate of about 98% versus about 60% for OD. We also had an open return policy, versus a very limited one by OD. We offered over 21,000 line items to select from, versus about 5,300 by OD. Our prices were actually lower than OD’s because we did not spend 12% on advertising, and another 15% on inventory and handling costs. We used their very costly and extensive advertising campaigns against them to produce exceptional growth. Until OD caught on and orchestrated a very generous buyout to get us out of their hair.
C. Look at how fast food restaurants (McDonald’s, Burger King, Wendy’s, etc.) tend to locate their stores near one another. They feed off of each other, by attracting more hungry people to the area.
By USING your competition and what you learn from them, you can prosper because you focus on improving your business and not on beating your competition. In fact, many times you will prosper because your competition grows and prospers as well. You will win more often than not by using your competition to your unique advantages.
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