You probably know the feeling. You’re discussing your proposal with a potential new client and ever so casually they mention that a competitor has offered to do it for less. Your stomach shrinks and you wonder if this new company will be the end of you. Sometimes, having competitors can seem like the worst thing to ever happen to business.
Admit it, you've dreamt of having the market all to yourself. After all, no one likes losing customers to the "enemy". But be not careful not to fill your head with paranoia. "What if my competitors do better than me? What if they grow to gargantuan proportions and squash us like a fly?" You start to wonder if you'll be run out of business and left penniless.
However, this is rarely the case. You see, competition can be a good thing for your business. Healthy competition can be an awesome catalyst for growth.
Let your competition drive you
When a number of companies offer a similar product, there can be little doubt that you're offering a valuable service. However, the downside to this is that your customers probably know about your competitors. But it's not all doom and gloom. This means that the burden of educating your potential clients is actually shared with your competitors. This can help keep your marketing costs down, and help awareness of your product or service.
If we were to look at things from a different perspective, we might imagine a world without any competition. But what would that really mean for your business?
Well, there would be no one to keep you on your toes and no one to venture into new and unexplored territories. It would be all too easy for your business to stagnate. There would be little incentive to innovate. Competition ensures that you evolve and continue to build better products.
Of course, there are other benefits to having competitors.
It is nice to have valid competition; it pushes you to do better: Gianni Versace
Improved customer service
With multiple companies vying for the same customer, you have to make sure you stand out. Huge marketing campaigns and PR stunts aren't alway within reach of smaller companies, so how can we "out-wow" our competitors? You guessed it, by owning customer service.
Customer service plays such a large part in business that there are companies who thrive on this alone. For example, you might offer the same product or service as a competitor, but with superior customer service you could walk away with a sizeable chunk of the pie. At Nusii we pride ourselves on our customer service. Being small meant we had to differentiate ourselves in every way possible, and providing personal and outstanding customer service was a great place to start.
Keeping a close eye on your competition allows you to understand market nuances that you might have otherwise missed. Learn from what appears to be working for your competitors and what isn't. You can gain valuable insights about the market by peering over the fence every now and again.
Seeing your business from the outside is hard. You don’t always know what your strengths and weaknesses are, but taking a look at your competition will certainly help you find out. It will help you to focus on your core values and deliver what you’re best at.
But beware, many businesses fall prey to "competition obsession". When businesses focus all their attention on the competition, things can start to go very wrong. It can create a kind of competition envy. Obviously your competitors aren’t going to advertise their failures, so as far as you're concerned they have the perfect business. This tunnel vision can push you to imitate your competition, instead of forging your own path. This is never a good thing. Make your own mistakes, not those of your competitors.
Let yourself benefit from your competitors
Competition can’t be avoided so make the most of it, but bare a few things in mind:
Don’t be a copycat
Even if you’re the first to enter the market with a new service, others will follow and start competing with you. You'll have your own way of doing things and your own special know-how, so stick to it. Don’t allow yourself to become a copy of others. Instead of jumping on the bandwagon and doing whatever your competitors are doing, choose your own path. This is something we built into the core of Nusii. We are truly doing something unique with proposal software, and we have no interest in following others.
I view my strongest competition as myself. You're always trying to top yourself, rather than worrying about what other people are doing: John C. Reilly
By choosing your own path, your customers will get more value. Sure, some will go to your competition, but the ones who stick with you won't be there because you’re a few dollars cheaper. These customers will be there because they value your service. This in turn means your pricing can be completely independent of your competitors.
Do not underestimate your competitor
Competitors come in all shapes and sizes. But they all want to make money. You should keep a wandering eye on your bigger competitors, but the truth is, smaller players can be more dangerous. They operate under the radar and can out manoeuvre the big boys. They also won’t hesitate to take bigger risks. Stay on your toes, and don’t get down every time somebody new appears.
Competitors and co-operation. It can be done
Apple and Microsoft are partners. Up until a while ago, Apple and Samsung were partners. Sure, the partnerships are limited, but they’re constructed in such a way that both parties can benefit. There is absolutely no reason why competitors can’t co-exist. You can even co-operate with your competitor.
Partnering up can have huge benefits. In some cases they lead to mergers of epic proportions, in others they just run their course. But not before both parties have enjoyed healthy returns. And these returns can be vast. Not only in the financial sense, but also for your customers.
Remember Apple maps when they first removed Google maps. There were so many issues, the complaints came pouring in. A partnership soon cleared that up and all was fine again.
There really is no reason to not consider cooperation with a competitor. If you’re able to cover all the legal aspects properly and there is decent trust between the parties, the world is your oyster.
Another not so obvious way to work with your competitors is via referral. Your goal is to help your customers, right? So if your company doesn't provide a service, refer them to someone who does. We do this at Nusii. If someone is looking for a function that Nusii doesn’t provide, we’ll happily suggest a competitor. Why wouldn’t we?
The early bird gets the worm, but the second mouse gets the cheese: Willie Nelson
Fill the void
Know your competitors inside out. Learn about their strengths and weaknesses. What are they doing? How are they doing things differently? And what is not working in their favour?
Filling a gap in the market can allow you to build a superior product. And all you have to do is stay in your toes.
Offer value, all the way
Never get into a price war with your competitors as there’s only one way to go, and that’s down! Give your customers value. Show them why your product is valuable. But remember, if you’re too expensive for a customer, perhaps they weren't your customer anyway. Don't get down on it.
Competition can be exhausting, and in some cases depressing. But if you handle it well, you can actually benefit. Open up to the fact that you can learn from your competitors and your business can continue to grow as you dreamed it would.
Competition is a good thing, so put it to good use!