In business, it is good to have your eye on the competition. But be careful that you aren’t watching so closely that you take your focus off of your goals. When you start comparing your business to others, you run the risk of falling into the comparison trap.
Scanning the Market
A good marketer knows the importance of scanning the environment for factors that are favorable or unfavorable to his business. Part of this step involves examining your competition.
Who is the competition in your market? How are they positioning themselves? What are their prices? How are they different from you? Moreover, how are you different from them?
These are good questions to ask but if you aren’t careful, you could soon find yourself in the comparison trap.
This happened to me several years ago. I analyzed all of my local competitors and found that their prices varied significantly. The biggest thing I noticed was that my prices were higher on the low end but lower on the high end. I began to question whether my prices were right. I fell victim to the thought that if we all provide the same service, people would likely buy from the lowest priced provider. I became doubtful of my price structure so I revised it.
I learned from this experience that the worst thing you can do in business is compete based on price. When companies race to the bottom on price, it forces weaker companies to fold and results in stronger companies developing a monopoly, which later results in higher prices for the customer.
A better plan is to provide better service. Sure the service is the same but how you deliver the service can be different.
It’s okay to be different in the business world. There’s plenty of business to go around. So instead of looking at your competitors and imitating what they do, find a way to be different.
One way I tried to be different several years ago was by using a three-tier pricing structure. The differentiating features of each plan was frequency of service. Biweekly service had 26 cleanings per year, weekly service had 52 cleanings per year, and twice weekly service had 104 cleanings per year. Knowing from experience that small dogs produced small waste and larger dogs produced larger waste, I designed each tier for a specific number and size of dog.
We recommended biweekly service for up to 2 small breed dogs, weekly service for up to 3 small to medium sized dogs, and twice weekly service for 2 or more large breed dogs.
The market responded well to this model and I kept it in place for over two years.
Later, I decided to go back to the per dog method of determining price when I finally decided not to compete based on price. Instead, I would focus on great customer service and support and learned that reliability and integrity set my company apart from my competitors.
Focus on Your Mission
While it is good to “peek” at the conpetition, it is better to simply focus on your mission. Stop trying to copy your competitors. God made you different so just be you. Customers appreciate you being you over anything else. So be you.
Honor your word.
Keep your customers informed.
Be the best you can.
Accept your weaknesses.
Focus on your strengths.
Work hard and be faithful.
Your diligence will reward you.