I don’t talk much about competitors.
I avoid it for a couple of reasons. First, because you have far more to gain by investing time and effort into improving your own business. Second, worrying about what someone else is doing is usually a waste of time since you have no control over their behavior.
There are a couple of exceptions:
- When a competitor does something smart.
- When a competitor repeatedly damages the reputation of your market.
We’re going to spend most of today focused on the worst of these.
When a competitor does something smart
When you do something smart, a competitor will copy what you did – perhaps. Other times, competitors will watch what you did and fail to see value in it, fail to understand it, or decide that it’s not a good fit for their business.
Sometimes, you’re the one watching that happen. You owe it to yourself to pay enough attention so that when a competitor does something smart, you can analyze what your action would be. For example, if you run a high end hotel and the other high end hotel in town adds valet parking, you’re going to need to think about how to respond.
The key here is not usually the thing being done. It’s seeing the move for what it is. Deciding why it was done and what it accomplishes isn’t always obvious. Consider it carefully.
Competition damaging the market
Usually a competitor who can’t get out of their own way will find a way to go out of business. This allows us to ignore them and let them flame out on their own.
Sometimes we aren’t that lucky. When that happens, what we’ll find is a business (and owner) who damages their own business, but not bad enough to make it fail. You’ll see this in markets with enough demand that even a poorly run business can find a way to make enough to survive.
The problem is that a business run this poorly creates a reputation that can damage every business in the sector. If there’s more than one of them, it’s a matter of time before their combined reputation stains an entire market full of businesses.
Don’t take it.
Are you willing to let your competition destroy the reputation of the market you’re in? Of the business you’ve worked so hard to build?
Think about the effort you invest to market and sell what you’ve worked so hard on. What would it take to accomplish the same thing if your reputation wasn’t what it is right now?
How many times have you heard people discuss putting off a transaction with a vendor because of prior experience with another vendor? You know of markets that already have this problem.
How would you cope with a business or group of businesses that do things to cause the public to think less of the rest of the businesses in your market?
Are you sure they don’t already exist? If not, how do you find them?
Finding bad eggs
Whether these reputation-damaging competition exists or not, you’re likely to find the scoop on the social review networks where your clients report their experiences.
In general, Yelp is the best place to start since their reviews aren’t limited to any single type of business. They do have more restaurants (for example) than many other types of businesses, but their coverage is quite broad.
In some cases, you’ll find more industry focused social review services, such as TripAdvisor. Finally, if your client community includes students, their school / university may have a review service, ombudsman or similar.
You should be reviewing and responding to comments on these services on a regular basis, but in this case, you’re looking for your competition.
If you find consistent patterns of client abuse and reputation damage that span a number of your competitors, you have a decision to make.
What to do
If you can take the guilt-by-association reputation damage, or you don’t think it will affect you, stick to working on your business – but keep an eye on it.
If it’s more than you can take or it gets worse, you have a few choices:
- Buy them out.
- Turn up the competitive heat.
- Decide what you’re willing to do to save your business. Remember, your business and its jobs are at stake.
Are you willing to lose your business because they don’t care about theirs?