Business owners frequently consider their competition as the enemy. Even the word “competitor” creates a need to compete against - to destroy, to attack or to beat. Business owners are most often very competitive themselves and the idea of having someone to compete against is very attractive. Many owners focus their businesses on beating the other guy, because that is how they measure their success - just like in sports, where one side has to beat the other side to win.
However, by focusing so hard on beating the competition, owners get diverted from their real objectives, such as increasing productivity and profits and controlling costs. Sometimes owners want their competition to thrive and prosper so that they can hitch a ride on the wave to prosperity - much like how successful McDonald's locations attract other fast-food businesses, which also prosper.
The first step to prospering because of the competition is to identify and analyze the real competition. Frequently, the real competition is not readily apparent. Sure, businesses might have a new and unique product or service, but when the needs they actually have are defined, owners will discover that many other types of products and services fulfill the same needs.
The next step is to embrace your competition. You want and need competition. Here are five reasons why business owners should embrace their competition:
1. Your potential customers need to compare your business and your products and services to someone or something in order to come to the conclusion that your company is the one that will best meet their individual needs.
2. You need your competition as a place to send undesirable customers. Sometimes, you can see a bad customer experience coming and it would be nice to be able to avoid and/or get relief from them. And you can send the message that you do not fear competition, causing skeptical potential customers to become more appreciative of your business. Many potential customers will try to use your competition for negotiating leverage to overcome their fears of being taken. Your confident understanding of your competitors and of your desirable customers will convince many of these customers to change their perspectives and attitudes of you and your business.
3. You need to be pushed to continually improve. Monopolies create terrible consequences. Competition will benefit you because it creates a desire to keep improving. Businesses either improve or they don't. By not improving, a business is not standing still, but is, in reality, declining toward its eventual demise.
4. Your competition frequently will teach you ways to reach your business goals. Many owners execute very profitable programs that follow similar, if not identical, programs that had successfully been implemented by competitors.
5. A good many of your greatest business opportunities will be provided by your competition. They may choose to ignore some of the market or are incapable of properly serving a particular segment. And when the competition has negative experiences with their customers, those people will be looking for someone who can meet their needs.
One couple I know started a contracting business in a market that had an overabundance of competitors and greatly prospered - even with higher prices. They were able to do this because one simple thing separated them from the rest: They were the only firm in their market that would answer their telephone with a friendly live person and responded to requests swiftly. The competition actually drove excellent customers to them.
You, too, can greatly prosper because of the competition in your market.