It’s interesting to see just how many entrepreneurs will throw their hands up in defeat when competition comes their way. Many are ready to throw everything they’ve worked for out the door for fear they won’t be able to compete. It may not be advantageous to get yourself involved in a market that’s already highly competitive because it can be hard to break into. However, if you’re already in business a little competition is almost always good. Competition can actually be your friend.
If you’re rolling your eyes thinking that’s crazy, you’ll want to read on. If a market has a lot of competition that’s an indication that the product or service is desirable and all the attention will make it even more desirable. What you want to do is stand out from your competitor all the while taking advantage of the advertising and marketing they do.
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Let’s look at an example. Let’s say you sell a popular diet supplement, and you have a significant amount of competition that is spending money on advertising in newspapers, online, perhaps even on television. That advertising is giving the diet supplement a great deal of exposure and as a result the customer base has the potential to grow. You can benefit from the growing awareness of that product and then target your own advertising to show why potential customers should buy from you. Perhaps you have a better price or maybe you ship. Establish your own niche amongst your competition.
Here’s an example that Tom Egelhoff of SmallTownMarketing mentions on his blog.
“A friend of mine once parked across the street from his competitor at six o’clock in the morning. He noticed several people who came by between 7:30 am and 8:00am to drop off cleaning. The problem was the competitor didn’t open until 8:30 am. My friend immediately began advertising his new `convenient early drop off hours.’ He had found a weakness in the competition.”
To be successful in any competition you need to understand a few things very well
a) Your products or services – their strengths and weaknesses
b) Your competitor’s products and services – their strengths and weaknesses
c) The customer’s perception of both your products and services
e) Marketing message
f) How your product is different from your competitor’s
Let’s look at another example. Let’s say you are a florist and then after a couple years of being established in a market, another florist opens up just a couple of blocks from where your business is located. This can actually be good for your business, bringing more people to the area that are looking to purchase flowers. You simply need to capture that potential customer base with good marketing strategies. A mylar balloon with every floral arrangement, A singing telegram with every delivery or anything interesting you can come up with.
When competition comes along the last thing you should do is give up. When you recognize that the competition can actually help you grow your business at a much faster rate than it might grow if you had no competition at all. Any economist will tell you competition is healthy. In fact, it’s what our economy is based on.
Don’t fall into the trap so many others have – running scared from competition. The key here is to analyze the competition and learn how you can benefit from what the competition is doing. Let your business prosper and grow because of competition.
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