Business Solutions Forum: How to compete with a new business drawing away customers
The Business Solutions column in our new Expert Network section is designed to be your personal business advisory sounding board with experts from different business areas available to answer your questions. This installment offers suggestions to this query: I have a new competitor, and they are really having a negative impact on our business. They are constantly introducing things that draw customers away from us. What can we do about this? I don't have a fortune to spend on endless marketing campaigns.
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All industries can interact and communicate to help out each other — ours are no different. The Business Solutions column in our Expert Network section is designed to be your personal business advisory sounding board with experts from different business areas available to answer your questions. The format for this as with other Expert Network sections will not be unlike a “Dear Abby” for business; however, SNEWS® will expand beyond the typical single columnist to tap into a broader panel of experts, many from among SNEWS readers. Together with experts, SNEWS will offer a forum for readers to discuss a topic, chime in with their own ideas, and suggest different recommendations to a variety of business concerns or issues.
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Q. I have a new competitor, and they are really having a negative impact on our business. They are constantly introducing things that draw customers away from us. What can we do about this? I don’t have a fortune to spend on endless marketing campaigns.
A. I have seen many businesses confront similar situations. Too many have done a poor job of responding.
The most common mistake, in my view, is when companies attempt to take on a competitor by competing on the same platform as the competitor. I call this the lemming affect, and it is shockingly common.
- The competitor lowers prices, so we lower prices.
- The competitor launches a massive advertising campaign in local papers, so we do the same.
- The competitor targets a new and emerging market segment, and so do we.
Don’t let your competitors decide how you should run your business! Instead:
- Carefully evaluate your own company and ask yourself the following questions: What are we really good at? What are our ‘core competencies?’ What can we do better than anyone? What are we poor at? What are our weaknesses?
- Complete the same evaluation for each of your key competitors. Be honest with yourself. Compare their strengths with yours, and their weaknesses with yours.
- Look at the market around you and look for opportunities that take advantage of your strengths, particularly those strengths that you don’t share with your competitors.
- Determine how you can cost-effectively pursue those opportunities.
- Constantly strive to differentiate your company from your competitors, not copy them.
Often doing a better job of competing is not a matter of outspending your competitor. In fact, if your competitors seem to be spending huge amounts on marketing or advertising, that in itself suggests an opportunity to differentiate yourself. For instance, plan a community service project that will cost a fraction of your competitor’s marketing campaign, and then make sure every magazine, newspaper, radio and TV station knows you are doing it. Your community will recognize you as a valuable neighbor and honor you with their business, all while you under-spend your competitor!
Ascent Advising provides wide-ranging business advisory services to companies around the globe, coming alongside business owners and executive teams to define and achieve even greater successes. The popular email newsletter, “Adages from Ascent,” brings to light vital and innovative concepts for running a business. For a free subscription, and to view past issues of the newsletter, visit AscentAdvising.com and follow the link for “Adages from Ascent.”