The competition is something that business owners have a love-hate relationship with.
When you’re starting out, you wonder if there are enough customers. When you’re established, you wonder why there are suddenly so many competitors.
Then one day a new competitor launches, targets the same customers, starts advertising everywhere, even copies your website and you find yourself asking “Should I be worried?”
The answer is usually no. In fact, competition is often a sign you’re doing something right.
If nobody wants your market, that’s a bigger problem
Many business owners dream of finding a market with no competition, but no competitors can mean:
- There isn’t enough demand.
- Customers don’t value the solution.
- The market is too small.
- The opportunity isn’t commercially viable.
Healthy competition usually tells us the opposite. It tells us there is demand, opportunity worth pursuing and customers willing to spend money.
Think about some of the most competitive industries in the world.
- Coffee
- Construction
- Accounting
- Marketing
- Legal services
- Hospitality
- Real estate
These industries are crowded because there is demand. Competition often validates the opportunity and can push you to do and be better.
You don’t need to be first to win
When Xero launched in 2006, accounting software wasn’t exactly a new idea. They were competing against MYOB, the established market leader and other players like QuickBooks and Banklink.
The existence of competitors proved there was strong demand. Businesses needed accounting software and were willing to pay for it.
Rather than trying to be the same as everyone else, Xero focused on what it believed the market wanted next: cloud-based accounting that was easier to use, more collaborative, and built for modern businesses.
The result?
They didn’t win by eliminating competition. They won by delivering a better experience for their ideal customers.
Today, Xero competes in one of the most crowded software categories in the world. But competition didn’t stop their growth, it validated the opportunity.
The biggest threat can come from within
Business history is full of stories about companies supposedly being destroyed by competitors. For example, Kodak, Nokia and Blockbuster.
But if you look closer, competitors weren’t really the problem. The real problem came from within.
- Kodak invented the digital camera but parked it because they didn’t want to disrupt their existing film business.
- Nokia saw smartphones coming but hesitated, thinking pursuing this was too risky. 6 years later, Apple launched the iPhone and the rest is history.
- Blockbuster recognised the importance of streaming and even launched a streaming service, only to have this undermined by their own video business franchise owners.
Many businesses don’t lose because competitors exist. They lose because they become distracted by competitors and lose focus on what they should be doing next.
The danger of competitor obsession
I’ve seen businesses become so focused on what others are doing that they stop doing the things that made them successful in the first place.
They start copying prices, messaging, offers, websites, or social media content. The problem is that copying almost always puts you one step behind. And, while you’re busy reacting to competitors, they’re busy reacting to somebody else and eventually everyone looks and sounds the same.
I call it swimming in the sea of sameness, leaving customers wondering why they should choose any of you.
How to identify your competitive advantages
When a competitor appears, rather than trying to stop them, ask yourself “What can we do that they can’t?”
You will already have competitive advantages, but if you’re unsure of yours, start by asking:
- Why do our customers choose us?
Look for patterns by talking to customers, reading testimonials, and reviewing enquiry emails. Note key themes, words and comments as these tell you why they actually choose you, not why you think they do.
- What do our customers consistently compliment?
Is it your:
- Fast response times?
- Technical expertise?
- Problem solving?
- Friendly service?
- Industry knowledge?
- Communication?
- Reliability?
- Great people?
These are often clues to your real differentiators.
- What do competitors struggle to replicate?
Anyone can copy a logo, website or pricing. It’s much harder to copy:
- Reputation
- Relationships
- Experience
- Trust
- Culture
- Values
- Service
- Specialist knowledge
The strongest competitive advantages are hard to duplicate as they take time to establish.
- Double down on what makes you different
The businesses that win don’t try to be everything to everyone. They know who they serve, what they do well and communicate it consistently.
Double down on the things your customers value most. That doesn’t mean ignoring your weaknesses as improving a weakness, even by a small percent, can improve your productivity and efficiency.
But when you amplify your strengths, your ideal clients will overlook your weaknesses, (and even defend you if you are criticised for them) because they love doing business with you.
Are you competing on the right things?
If you’re feeling pressure from competitors, it may be time to step back and take a fresh look at your positioning, messaging, and competitive advantages.
That’s exactly what we help businesses do. Practical marketing advice and strategy designed to help you stand out for the right reasons.
Contact us for an initial chat.