Why should you be thankful for your competitors? That’s easier to answer than you might think. Competitors make you better because you are challenged all the time to up your game. You can’t lose your edge when you are the hunter or the hunted.
The Chess Game
If you have ever played the game of chess, it’s a strategy game where you have to out-think your opponent. They make a move and you have to make a counter move. You have to always be one step ahead of your competitor. One wrong move can dramatically affect the outcome of the game.
Knowing your competitor’s next logical move can help you beat them. You have to get into their head. Think the way they think. Understanding your competitor’s strategy is only part of the game. You also have to understand what your customer’s needs are. That too can affect the game. If you are focused too much on what your competitor might do, you might lose sight of what your customer’s needs are. Too often I got caught in a pricing war with competitors. If they dropped a product’s price by 10%, we would drop it by 15%. We found that didn’t dramatically impact our sales. When talking with our B2B customers, they were more interested in finding the products they needed as quickly as possible versus saving a few dollars. Their time was more valuable than the potential savings sifting through promotions. To the competitors, it was all about promotional pricing. However, to our customers, it was all about saving time.
Be Aware of Your Surroundings
When you have strong competitors, it makes you much more aware of everything that is going around you. You become more sensitive to your competitor’s messaging in emails, print and online. Your competitors are fighting for the same customers that you are. What is your differential advantage? Do you offer better customer service? Are your hours of operation the same or better than your competitors? Is your website search engine optimized and easy to use? Find your weaknesses and fix them to make them strengths. If you don’t know what your weaknesses are, ask your customers. Your competitors probably already know your weaknesses.
Keep your eyes open for new competitors. The competitive landscape is always dynamic. If you are profitable in your market, rest assured someone else is going to figure that out. IBM owned the computer market for years. Dell, Gateway and Compaq went hard after that market and upset the balance of power. Today, Apple, Lenovo, Acer, Asus and HP to name a few are in the ring. It is difficult in today’s marketplace to stay on top of the mountain. Look around. You’re not alone and don’t be surprised if companies that you never thought would ever be competitors are now.
Competition Can Make You Stronger
Look at the constant battle for market share between Coke and Pepsi. They are always taking swipes at each other and try to “one up” the other in their marketing and advertising. Coke introduced “Share A Coke” using personalized cans and bottles. Customers were looking for soda cans with the names of their spouses and friends to share. This was a very successful branding campaign. Pepsi did a counter television ad where two women are standing in front of Pepsi and Coke vending machines one holding a bottle of Pepsi and the other a bottle of Coke. The voice over announcer tells the women that this summer they can win tickets to the concert of their choice every hour, but only with Pepsi. The happy woman holding the Pepsi bottle says to the other woman “At least your name’s on the bottle” and the women holding the Coke bottle says “Do I look like a Larry to you?” Punch…counter punch.
The battle between Coke and Pepsi has made both companies stronger because they are constantly reinforcing their brand and introducing new products. Sometimes it is very successful and sometimes it is not. Take “New Coke” for example. Coca-Cola decided to introduce a new recipe that tasted more like Pepsi and retire the original Coke on April 23, 1985. It was a huge marketing disaster. Loyal customers revolted against Coke. Doing damage control, Coke reintroduced the original Coke as “Coke Classic” on July 11, 1985, but the damage was done. Despite the focus groups and 200,000 taste testers of New Coke, Coca-Cola didn’t realize how attached their customers were to their brand and the original Coke. Pepsi took advantage of Coke’s marketing blunder and launched a new commercial “Why did Coke change?” using a teenage girl questioning why Coke changed She then drinks her first Pepsi, smiles looking into the camera and says “Now I know why.” Competition has made both companies stronger and better. The ultimate winner is the customer who gets a better product often at a better price.
Although many companies don’t want to admit it, competition makes you better. They make you much more aware of your strengths and weaknesses so you can improve and keep your eyes open for new competitors. Your products and services are constantly being compared by customers and competitors, so you need to be the best you can be. Isn’t that what we all want? Thank you competitors.
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Photo credit: La Shola y EL Gringo? / Foter.com / CC BY-NC-SA
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