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Fair FightBy: Kim T. Gordon If you're tempted to view your closest competitors as "the enemy," it's time to take a second look. In today's highly competitive marketing environment, quality competitors can actually be an asset to your company. These are the businesses that stand behind their products and services, charge a fair price and enhance the reputation of your industry. Yes, the companies you butt heads with daily can help you reduce marketing costs, spur innovation and lead to new marketing opportunities. So while at first it may seem like a crazy notion, here's how a highly competitive environment can give your company a leg up. Reduce Marketing Costs >The best thing about having active competitors is that they can lower your marketing costs by shortening the learning curve for your prospect base. For example, whenever an innovative new product or service is introduced – say something as unique as the very first fax machine -- there's always an information gathering period customers must go through before they're comfortable making a purchase. But by the time a second or third company markets a similar device -- undoubtedly with a new wrinkle added -- customers have passed through the educational period, shortening the sales cycle and significantly reducing marketing costs. > Once your customers have shopped your competition and gathered basic information, you’re in a better position to win them over by offering additional value thanks to superior product or service benefits. This is why having comparable, high-quality competition is an asset. Inferior competition can be a problem, especially if you’re the lone higher-priced provider surrounded by a sea of companies with lower prices. In that case, your product or service will always look "expensive," and competition based on price will remain a large issue for your company. But among quality competitors, the most effective strategy is to market based on a value proposition not price-cutting strategies. This preserves your ability to offer more costly benefits, such as in-depth customer service, which add value and help you win and keep more customers. > In many industries, businesses have become highly specialized niche marketers either by attacking a particular market segment or by taking on an exclusive specialty. Strategic marketing partnerships are a viable and lucrative option for entrepreneurs who may feel limited by their existing niche markets. Often, small business owners partner to target a broader base without having to bear the full marketing cost. You can join together to pitch large contracts you might not win on your own. Or, you could create an alliance with similar businesses to promote your industry, region or companies as a group, thereby enhancing the image of your group as a whole and increasing sales for all. Avoid Costly Mistakes > No matter how you view your competition, keeping a close eye on them helps spur innovation under your own roof. Become a student of your competitors' marketing by conducting periodic reviews of their materials, from their brochures to their Web pages. This will help you pinpoint opportunities and avoid costly marketing mistakes. For example, by watching consistently and closely, you'll be able to track your competitors' successes and failures, such as campaigns that yield poor results or the introduction of special features that fall flat. What do you bring to the table in terms of insight, expertise, manufacturing ability or service innovations that your competition doesn't? What will you offer tomorrow that will keep customers coming back for more? The key is to focus less on what you currently market and more on the skills you possess. This will help you discover the newest wrinkle -- and build on that value-added proposition -- to win more sales. Get In-depth Coaching on this Topic>> Kim T. Gordon's columns and articles are read by nearly 3 million small and home-based business owners each month. She is the author of two books, including Bringing Home the Business: The 30 Truths Every Home Business Owner Must Know. Copyrighted material. May not be reproduced in whole or part without expressed permission from the author. |
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