Categorized | Business

Entrepreneur

The Competition

By Tom Irmen

Throughout the course of a year, I am afforded the opportunity to meet with hundreds of small business owners. Frequently, while helping our clients develop their individual marketing strategies, the topic of competition arises. Their competitive responses vary widely, from complete indifference to rage. I actually had one small business owner state that he would cause physical harm to his principal competitor if given the opportunity. While I didn’t take him seriously, it was apparent from his comments that his competition had really gotten under his skin.

Competition is inevitable. In fact, it can be downright helpful.

I recently listened to the CEO of the Chicago Mercantile Exchange being asked during an interview about the competitive pressures his company was experiencing from competitive exchanges. He was most gracious in his response. While acknowledging the competitive pressures that the CME faces, he reminded the interviewer that, if it were not for competition, his exchange would still be trading in butter and eggs as it had earlier in its 100-plus year history.

How do you respond to your competitors? Ignoring them is unwise. It’s important to evaluate them closely to try to discern any changes they may be implementing which might be signaling a marketplace change. You also need to monitor them for potential opportunities which might be successfully exploited.

I’m sorry, but rage is just stupid. I’ve observed numerous small business owners, and a few big ones, too, who are virtually obsessed with their competition. They often spend more time contemplating their competitor’s next move than they do implementing their own marketing strategy. Rage has the potential to paralyze a small business owner, taking them out of their game as they remain preoccupied with their competition.

The owner of a small retail electronics store was asked by his landlord if he thought it might be advisable for him to relocate since Best Buy was going to be moving into the same retail plaza. The owner, instead, used this worst case scenario to his full advantage. He decided to focus on differentiating his electronics store from Best Buy by promoting his associates’ superior product knowledge. Best Buy brought in the customers, many of whom visited his store as well. His strategy paid off, and he was rewarded with double digit growth year after year.

What does the competition manifest in you? Ignore them, or express rage, at your own peril. Study them, successfully differentiate yourself, and your competition might be the best thing that ever happened to your small business.

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