Your Biggest Competitor: You

On Steve's Mind: a Newsletter

Brand HarmonyCompanies spend a lot of time worrying about their competitors, reacting to the moves of their competitors and blaming their competitors for the circumstances they face. But as an advisor to many companies, I often see the same pattern: The biggest obstacle to success is not the external competitor, but the company itself.

Consider how external competitors can hurt your business:

  • They can reduce their prices, putting downward pressure on your prices and margins.
  • They can persuade a customer to buy from their company, instead of from you.
  • They can say bad things about you.
  • They can offer your customer better alternatives, making your products and services look inferior.

Let’s address each of these.

They can reduce their prices, putting downward pressure on your prices and margins.

Yes, it’s true, you can’t control your competitors’ prices. But you can control the value your customers see in your prices.

Yastrow and Company has consulted to many companies in so-called “commoditized” industries. When doing research with customers of those companies, we always discover many issues other than price that drive customers’ choices, preferences and loyalty. If you lose on price, it isn’t only because your competitors have offered lower prices. It’s because the customer didn’t see the value in your prices.

They can persuade a customer to buy from their company, instead of from you.

Sure they can. But think about some of the individual sales you have lost. How often was your company an obstacle to the customer’s purchase decision?  Was it difficult to buy? Were your products and services lacking? Were your salespeople not strong?

Trust me, this is a valuable, if humbling, perspective to have. Sure, competitors may outsell you, but, when this happens, the healthiest approach is to ask, “What could we have done better?” not to complain, “Dang, if it weren’t for those competitors.”

They can say bad things about you.

I’m sure they do. But in all my years of interpreting market research related to my consulting projects, every negative thing a respondent has said about a company is based on personal experience with that company, not hearsay.

(In the spirit of election season, I am sure that if I ever help a political candidate with their brand I’ll encounter something different. But your company is not running for office.)

They can offer your customer better alternatives, making your products and services look inferior.

I have two perspectives here:

  • If your products and services aren’t as good as your competitors’, it’s not your competitors’ fault.
  • Most purchase decisions have less to do with the core products and services being offered than you would think. Preference and loyalty are heavily influenced by factors that surround the product and service, which could include ease of doing business, personalization, relationships, etc.

This article is not meant to focus you on your shortcomings to make you feel bad. It is meant to empower you to stop focusing so much on your competitors and focus more on what you can do. Your biggest competitor is not out the window, it is in the mirror.

The good news: You can’t control what you see out the window, but you can control what you see in the mirror.

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Posted in Invent Your Future, Latent Profit, Marketing, Newsletters, Observations

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