Sometimes business is like war. Competitors emerge with innovation, aggressive marketing and lots of drive, and threaten your business. How should you respond?
There are some predictable answers. Should you ignore the other players and hope they go away? Should you redouble your efforts to maintain and enhance your relationships, both with current clients and your supply/distribution channels? Should you hit back hard with fact-based (or emotional) counter-attacks?
I wish I could give you a one-size-fits-all answer but the story here is like war; it is usually fought on several fronts, and different strategies need to be overlaid or co-exist with each other. And a seemingly trivial blunder can result in grave, and painful, failure.
Here are the strategies I think to be most helpful.
Good intelligence counts. Know your story and that of your competitor.
I’m not advocating unethical corporate espionage or dirty tricks. However, you can certainly make yourself aware of your competitor’s marketing messages, study its product/service and see how it is resonating with your current clients. You’ll uncover flaws and strengths. You may elect to copy some aspects of your competitor’s strengths and adapt others.
Fight back creatively. (Integrity helps, as well.)
Some years ago, a former employee started a directly competing business. He knew our business model, and he was truly effective. At one point, the organizers of a major trade show asked us to write a positive advance story about their event (though we had never exhibited there). I said “yes” and wrote the story, without expectation of reward, but decided that it might make sense to seek out a trade-out deal with the show (where we would provide advertising in exchange for booth space, without a cash exchange.)
The show’s representative then told me some bad news — it seem they had signed a category exclusive agreement with the competitor that would result us in being banned from show.
This resulted in two intriguing side-bars. First, the show organizers came right out and apologized, knowing they had been “had” by the competitor. Then they set out to balance the equation and figured out some creative workarounds, with co-operative promotional value. (In the first year, I was granted an exhibitor badge and handed out my publication at the booth of another company; usually a show rules violation, but not this time. Next year, they show organizers found another category, which would allow us to slip in under the competitor’s nose.)
Remember to play the long game as you take care of immediate issues.
There were serious problems with our competitor’s business model — but these problems reflected our own business weakness. We could see problems in the competitor, but equally (and much more seriously) there was difficulties in our own business. As the market/business model experienced further stress, our business almost failed. The competitor’s collapsed. (There was a telling moment at the end, when the competitor’s last employee called and asked if he could work for us. Apparently his boss had misappropriated funds from the employee resulting in collateral problems, including court actions against the unfortunate worker.)
Thankfully, and perhaps with more luck than skill, I saw the writing on the wall and ultimately pulled out of the crisis with new business rules, systems and a reminder of how to maintain ethical standards.
Yes, take your competition seriously. improve your business to match and exceed you opponents. However, realize that if your competition is failing, you may be faltering as well, because there could be serious underlying market or business systems/values or technology issues.
Have you experienced serious competition and responded effectively? You can share your observations by emailing email@example.com or commenting on this post.