The Truth About Competition: The Power of Recognizing Competition for Business Success
Here is the Inconvenient Truth competition edition:
- You very likely have competitors.
- The sooner you recognize this, the sooner you will be able to address it and succeed.
“So, who’s your competition?”
As a business owner, I’m sure you’ve gotten this question asked many a time.
Your answer to this question may sound something similar to this:
- “We currently don’t have any competition.”
- “We are the first company doing this.”
- “Nobody is doing this as well as we’re doing it.”
- Moral high ground version: “Well, I don’t look at them as competitors; there is enough to go around for everyone.”
Which perspective do you align with? Option four sounds noble, but you’re not doing yourself, or there I say it, your competitors any favors having this mindset. So, let's explore an alternative approach to addressing this question.
Examining the following three perspectives will provide you with the proper mindset regarding competition:
- Direct vs. Indirect competition
- Visibility Breeds Distinction
- Competition is good for you!
1. Direct vs. Indirect competition
We’re all familiar with direct competition, but are you aware of your indirect competitors? Indirect competition refers to businesses that offer different products or services but satisfy the same needs or wants of your customer. Let’s say you run a local coffee shop that sells high-quality coffee and pastries. Your direct competitor is the other coffee shop in town. Your indirect competitors can take many forms you may not have initially anticipated. For example, a juice shop or a consumer's ability to make coffee at home.
With other industries:
- A lawyer - can your client use AI to write an operating agreement?
- Hotel - competing with Airbnb for accommodation options for travelers.
2. Visibility Breeds Distinction
Let’s take this to a deeper level. Your product or service is truly unique, and there is truly no one that offers what you offer. Here is the problem; if you are the only one aware of your unique attributes and qualifications, you won’t be able to stand out. You may think your product is an apple compared to your competitor's orange, but the customer sees it as apples to apples.
You are a trailblazer in your industry and offer something way better than anything else in the market, if the consumer is unaware of it, they are as likely to buy goods or services from you as from the business across the street. If the potential client is price conscious, they will buy from your competitors if they are cheaper and believe they are comparing apples to apples, not knowing that it’s apples and oranges.
Your business may offer unique services and a nuanced approach unlike any other in your industry. However, the consumer won't know that if you fail to communicate this with the market. In their eyes, you’re just like anyone else.
“But how about the fact that we are better than everyone else, and you can’t compare the value we provide, you can’t compare the experience we have, you can't compare the service lever we offer?” - Well, does your potential buyer know about this? Most likely not.
As long as you haven't succeeded in explaining your uniqueness, shoppers would assume that you are like everyone else out there. It’s your job to educate the consumer!
To differentiate yourself, there are two steps to follow:
- Understand your value and what makes you unique. You can accomplish this by gathering input from your team and reaching out to your customers to learn why they chose your product or service over others.
- Communicate your unique value to the market, which can be challenging and time-consuming. However, by effectively communicating what sets you apart, you can establish a distinct brand identity and attract customers who value what you offer.
3. Competition is good for you!
Ultimately, competition is not necessarily a bad thing. It keeps you on your toes and helps you thrive. Walt Disney was quoted saying, “I have been up against tough competition all my life. I wouldn’t know how to get along without it.”
We live in a competitive landscape! At the same time, let us recognize that there is an abundance in the world and enough opportunities for everyone.
“So, who’s your competition?”
After reading this, if someone were to ask you, “Who's your competition?” the best answer would be
- To acknowledge the presence of other players in the market who are quite good and not necessarily view them as rivals.
- Rather than focusing on competition, the primary goal is to build your own company by highlighting its strengths and unique offerings.
- It's important to communicate your value proposition and why your product or service is a cut above the rest.
This approach combines elements answer 3 and 4 mentioned at the beginning of the article while also emphasizing your unique value proposition.
At Oberlander & Co, we know what makes us unique, and we're always ready to help our “competitors.” If you'd like to chat with me, use this link to schedule a one-hour Zoom meeting with me.