Does it make you smile or cringe?
For some time, everyone’s agreed competition is good for consumers. Many will even say it’s good for huge corporations – increasing their agility and responsiveness. But there are compelling reasons indicating that competition is good for small and medium businesses (SMBs), too. Real benefits can be found for the life of your company when competition heats up in your space. So, if you’re in a market that’s already highly competitive – or you have new competition in your domain – smile. It’s a good thing.
12 Ways Competition can be Good for your Business.
If you’ve got an idea for a product, service or expansion of your business, competition in that arena validates that there is demand – and therefore opportunity – in the market. If you have no competition, you’re likely in too small of a market or there isn’t a paying, profitable demand for your idea. Do your homework!
Yes, you read that right: collaboration with competitors. Today’s global marketplaces and high-velocity of technology changes have created a perfect storm for companies – often it’s impossible to keep up alone, and strategic partnerships create a rising tide that floats all boats. Due diligence is wise, but often a larger contract or game-changing launch is one collaboration away.
3. SHORTER LEARNING CURVES
If you have competition, you can see much of what they’re doing, how it works and if it fails. This creates an opportunity for you to learn valuable lessons without the cost of time and expense of trial and error. This can be marketing strategies or streamlining R&D by eliminating options or tactics that have already failed.
4. CRUSHES YOUR BOX
Having good competition forces you to look outside your comfort zone and try things that are creative and out of the box. If the competition is stiff enough, it crushes your box – preventing you from climbing back into the “safety” of “we’ve always done it this way.” That’s got a lot of creative potential for your company.
5. MORE INNOVATION
Competition breeds innovation. Solving a problem and getting to market takes risk. Leaders can often be risk-averse. However, competition on your heels may push you to look for innovative solutions rather than lean back on your current level of success. Pushing for innovative solutions to real problems brings great advances to markets and consumers.
6. IDENTIFIES POTENTIAL THREATS
The reality of competition will cause you and your company to assess threats more proactively and thoroughly than if you were coasting along with no pressures from external forces. This alert posture and mindset will help you identify threats earlier and more accurately, potentially saving you time, resources and revenue. Stay ALERT!
7. FOCUS ON CUSTOMERS YOU WANT
Competition in your market means you will not catch every fish in the lake yourself. Every day you know someone else is reeling in a big one. This knowledge causes businesses to evaluate their nets, bait and tackle. In other words, you start asking, “If I am not going to get all of the customers, which customers do I want most?” That’s a very important question that drives effective marketing, sales activities, and strategy. Knowing who you really want to work with reduces churn and increases value. Get the right bait on the line.
8. DRIVES YOU TO DATA
Competition makes you work smarter. Today, this involves the use of analytics and data. There will always be a place for your entrepreneurial gut-check, but it must be combined with data to avoid the expensive error margin on instinct alone. Competitive pressure can promote better data driven decisions. With less margin for error you’ll want the data on your customer interests, behaviors, social signals, click-through rates, repeat sales, and more. This is available through marketing automation and other software solutions. To choose without data is to lose.
9. IMPROVES CUSTOMER SERVICE
It’s hard to ignore customer service issues when there’s competition in your domain. From the neighborhood shop to global ecommerce, it’s very, very… very easy to choose another company. And typically, the customer experience is the single-most important deciding factor in decisions to buy, return and recommend. Competition will force you to deal with customer service issues and resolve them quickly.
10. STRENGTHENS YOUR STRENGTHS
You’ve got A-Players. You’ve got great skills and teams. Competition will force you to up your A-Game even more. When faced with competition, you and your team are more likely to dig deep and give it your best. You’ll find more efficient methods, more creative strategies, and higher rewarding tactics. Complacency is not an option if you want to increase market share, revenues and profits.
11. REINFORCE WEAK AREAS
Without competition, you’re more likely to let leaks, losses and inefficiencies slide under your radar. It’s easier than facing the needed changes and improvements. Competitive pressure in your marketplace will help you tighten up and stop the leaks… even little ones. If your team is missing a key player or a better system, competition will cause you to take the time to find it. Many times a vendor or third party can fill the gap, but you might have limped along without pressure to do better.
12. ALLOWS INDUSTRY IMPROVEMENT
Competitors in your space create pressure for your company, but if you are willing to work collaboratively through associations and groups you can improve your industry – or even the world. Legislative reforms, better standards, global issues and humanitarian causes all find support through the collaborative work of leaders who realize that “competition” doesn’t have to mean “enemy.” Choosing to work and play well with others is mature leadership for today and tomorrow.
Competition doesn’t have to make you cringe. It’s an opportunity to fine tune your company’s performance and push the boundaries for innovative solutions. Embrace that external pressure and use it as a force for the good of your company. You’ll be smiling when you’re winning at an even greater level.