21 Jul 5 Reasons to Make Friends with Your Competitors
Originally posted July 21, 2014 by Marla Tabaka on www.inc.com.
When I owned my coffeehouse (2001-2004) people frequently asked me if I hated Starbucks. I didn’t. After all, Starbucks is responsible for re-introducing the culture of coffee in the United States and for establishing it in countries where the cafe culture never before existed. Starbucks put the romance into the coffee experience. Without those romantic notions consumers wouldn’t have given a second look at my drive-thru, or stop by for a fireside chat over a delicious cuppa joe with their friends. Thank you Starbucks!
Still, the truth is that the coffee giant made it impossible for an independent coffee retailer like me to compete, so I didn’t. Instead my business became what Starbucks is not. It too became a household name but for reasons far from its convenience and fast service.
Stop viewing your competition as the enemy and instead use it as the catalyst to brilliance. Instead of investing your precious energy into hating or envying your competitors use it to become the very best entrepreneur you can possibly be. Here’s how.
Give your customers another reason to choose your brand.
I knew that my delicious, fair trade coffee wasn’t enough to bring customers through the door so I gave more dimension to the consumer experience. I added open mic nights, brought in great bands, and did art shows and book signings. I even opened a private conference room to local businesses and organizations.
What can you offer in addition to your products or services? When you stand out from the competition by offering something of value that your competitors don’t, you give your customers a better reason to choose your product or service. How can you help your customers go beyond a simple purchase and truly experience your brand?
Keep the price down to remain competitive.
When I purchased my coffeehouse I knew that I would have to bring down the cost of goods. It forced me to move outside of my comfort zone and negotiate with vendors. In many cases I found new suppliers, and I never stopped negotiating.
Don’t get complacent about costs. Just because your suppliers have served you for years doesn’t mean they can’t do better. Also keep an eye out for new materials, parts, or products that will create a cost savings.
Innovate, innovate, innovate.
What sells today may not sell tomorrow. I’ve had too many entrepreneurs come to me for coaching because their once successful business became a cash drain.
Watch what your competition is doing to stay ahead and learn from their wins, as well as their failures. Don’t get complacent! Don’t get so caught up in the day-to-day operations that you neglect coming up with the next great idea. That’s the mistake these entrepreneurs made and, sadly, it’s often too late to breathe life back into the brand.
Upgrade your skills.
When you allocate all available cash and human energy to your business it’s virtually impossible to invest in training and education for yourself. Keeping abreast of the latest technology and trends, and constantly honing your leadership skills will help you gain and maintain the competitive advantage.
Make a list of your weaknesses and make a plan to build upon the skills you need to overcome them. If you cannot acquire those skills yourself, then outsource or hire someone who can provide necessary skills to compete effectively.
Embrace new technology.
As technology improves and evolves the marketplace changes, sometimes drastically and often overnight. You must be ready to adapt or change according to industry trends and business in general, or your competition will leave you in their dust.
Social media is a great example. Believe it or not I still hear from people who don’t even have a social media presence and don’t believe they need one. Last year I worked briefly with a caterer whose business took a nose-dive over a period of two years. We narrowed down the cause to a lack of online presence. Her closest competition added a customer-facing backend to their website and aggressively engaged in social media. But she simply refused to understand why this would make a difference and sadly, made no attempt to catch up with her competitors. Her doors are now closed.
Embrace competition and your whole world can change. This simple shift in your mindset will keep you engaged, aware, and in the lead.