Why do firms avoid competition?

How to Compete with Competitors in Today’s Marketplace

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how to compete in today’s marketplace

 

Words like nemesis, archrival, mortal enemy, rival, and foe will have to be reserved for the comic books. Competition, if viewed correctly, has a new role in today’s marketplace.

It’s true that competition is fierce and may make sales difficult. But viewed in a different light, the competition can actually make your business stronger.

The customer is very much in control of today’s sales process. This digital age has made the customer more informed, more savvy, and more empowered than ever before. Today’s customer also has upper hand in negotiating. The shift in power has everything to do with the internet and the research available with a few keystrokes.

Why do firms avoid competition?

Because of this shift toward customer empowerment, it is tempting to curse the competition for taking sales and curse them for cutting into your niche. While it’s true the competition throws a monkey wrench into your sales pipeline, you can also use the competition to your benefit.

Pre-internet, sales was all about the pitch: a high-pressure list of reasons to buy. Making an informed decision meant a lot of legwork and research for the customer.

Today, advertising has become much more sophisticated. Instead of a sales pitch, customers respond to sales enablement. That is, informational and marketing materials for every stage of the sales process. Sales enablement, done right, is designed to turn your company and its salespeople into trusted advisors.

When a potential customer realizes they have a problem or a need, their first response is to turn to an internet search. Google has called this point of needing information the Zero Moment of Truth (ZMOT), the point when a potential customer realizes they need more information. Effective sales organizations understand the role of today’s sale professionals is to give the customer objective information while helping them along in their journey.

Instead of a well-polished, high-pressured spiel, your most important sales strategy is to be a trusted source of information. In a Forrester survey, 74% of business buyers said they conduct more than half of their research online before making an offline purchase. So most customers don’t speak with a sales rep until they are well over half of the way into the buying process. This means the customer is pouring over your competition’s website just as much as they are yours.

Your key strategy in dealing with the competition, is to be visible and available, to set yourself apart by being competent and knowledgeable, and by offering the best solution. Execution is key. Here are some principles to remember about the competition:

Be more visible than the competition

It’s essential to be visible online, after all, that’s where your potential clients’ buying process starts. Maximizing your website for SEO or paid search engine marketing is a start. Once a visitor lands on your website, your content should be rich and engaging. Your website becomes the first step in helping your potential customers see you as a possible solution to their needs.

be everywhere your competition is

It’s also important to be as visible offline as you are online, if not more. Attend the conferences your potential customers attend by presenting or sponsoring booths. Network! Depending on your target market, well-placed ads in magazines and journals they read can also be effective.

Some firms avoid competition when it comes to web or print advertising presence. The reason could be attributed, in part, to a smaller advertising budget than the competition’s budget. But don’t let a small budget keep you from going head to head with the competition. Regularly adding helpful and informative content to your website is relatively inexpensive compared to other forms of marketing and can reap big rewards as customers learn to turn to your site for information.

Know thine enemy: Be an expert on the competition

Once you make contact with a potential customer, remember, your role as a salesperson is to be an expert advisor and guide. Being knowledgeable about the products you and your competitor sells will help educate customers as they make their decision. Customers appreciate experts who can teach them and help them make the best decision for their company. In turn the effort you make in forging a relationship with potential buyers paves the way for referrals and future sales.

When talking with customers who are comparing your product to another, don’t be afraid to complement the competing products, pointing out their advantages. Doing so shows confidence in your own offerings. Of course, when teaching the customer about the options, don’t forget to position your own product/service in a more favorable light.

For example:

    The (competition’s) model does have _____ and ______, which a lot of customers appreciate. I have found that many of my customers have preferred (our model) because of _____ and _____ when it came right down to it.

The old adage has never been more true today to “know thine enemy.” Your customers have done their research and you should too. By knowing your competition as well as they know themselves, you are able to make objective observations about your brand next to theirs. Ask yourself:

  • What are the strengths of my product/service next to the competitor?
  • What are the weaknesses of my product/service next to the competitor?
  • What does the customer need that both products/services lack?

Answers to these questions will keep you sharp and help you give your customer’s objective advice.

Competition makes you strong

The best way to beat the competition is to be the best product. Competitors push you to be at the top of your game in the marketplace. Innovative companies objectively analyze their competition and learn from them. By being keenly aware of the competition, thriving companies are always ahead of the curve. Rather than simply copying the competition, these companies look at the overall picture in the market and find an offering the customer needs. This innovation might be an overall better product or enhanced features, an improved warranty, excellent customer service, or a quicker method of delivery.

Without competition, companies become complacent and anemic. Companies who look at their competition as way to stay sharp and fresh ultimately provide a better product, service, and experience. Smart companies look to the competition to fuel this attitude of continuous improvement and innovation.

But it’s not just competing companies that can improve your game. Don’t forget competition within your own team or company. Friendly competition against other sales reps or other departments makes for a more engaging workplace. If you don’t already have a friendly competition going, try gamification strategies to improve results across your department or company.

Competition brings across-the-board credibility

When directly competing companies advertise their product or service, each company adds to the credibility of the other. Brian Scudamore talks about how competing companies can actually help each other in educating consumers about new trends or formats. In his Forbes article, Scudamore explains how both Netflix and Hulu--two competing companies--worked together to change their customers’ mindsets from using physical DVDs to streaming online.

From coconut waters to soft drinks and from exercise equipment to fast food, other similar products both compete and cooperate. The end result is more exposure and credibility for all.

If you can’t beat them, join them: COOPETITION

team up with competition to win

To use another adage, “if you can’t beat them, join them.” Because today’s customers are very familiar with the competition, you should be too. In fact, you should be so familiar that you engage in “coopetition,” as a Harvard Business Review article by Martin Zwilling suggests.

For executives, that means being in-tune with your sales force to know what’s going on out there, where the pain points are, where the competition is strong, and where your own product is strong.

Zwilling suggests 6 scenarios where teaming up with the competition yields results for both parties:

  1. Combine strengths to create a new market. Your company may sell yoga mats while a competitor sells yoga DVDs. Combine your products to create a “yoga in a box” solution targeted at potential customers wanting to get into yoga.

  2. Share costs for common needs. Perhaps both you and your competition require the same injections molds. Agreeing to share costs decreases both companies’ costs and increases the bottom line. A good example of sharing resources is the Dairy Farmers advertising for California Cheese. These advertising campaigns are sponsored by a group of individual farmers.

  3. Upsell related products. If you sell similar but related products, make a pact with the competition to upsell other offerings after the sale. Your bike shop might agree to suggest customizations at another bike shop after the initial purchase.

  4. Integrate offerings. If your competition doesn’t offer the quite same product as you, consider combining products for a package offering. For example, one software company offering bookkeeping solutions might partner with a tax preparation software firm to offer an accounting package.

  5. Cross-endorse. Affiliate marketing is an example of cross endorsement. By advertising each other, you and your competition help the customers make the best choice for them and both of you receive a portion of the sale. Another example of cross-endorsing Zwilling gives is a massage therapist and acupuncturist placing advertising for each other in their offices.

  6. Meet possible investors. Zwilling explains that cooperative relationships can lead to can be the potential for acquisitions later on down the road. Scudamore cites a study which shows collaboration is the key to international mergers’ success.

Smart sales teams, smart companies embrace competition

Why do firms avoid competition? The smart ones don’t. Competing with competitors keeps you at the forefront of the customer’s decision making process and keeps your brand relevant to the customer.

Through objective and informative web content, you establish your company’s credibility and become a trusted source of information in your customer’s journey. Having competition can actually strengthen your product’s market position as your reps are able to objectively discuss important features of the available options.

Competition can also lead to coopetition, an innovative approach to serving customers while expanding market influence. When you truly have confidence in your service or product, the competition is a motivation for you to grow stronger.

Through it all, remember that visibility is the key to competition. Being at the forefront of web and personal interactions ensures you can be there to help the customer in their decision-making journey.

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