It’s interesting how often you can ask an entrepreneur if they have any competition and they will say, “no” or “not really.” They will be aware of others out in the marketplace, but believe that what they offer is totally unique, special, or different. They started their business because they saw an opportunity or a hole in the market place. They will also respond that “the market is so big and we only need a tiny percentage so we aren’t even impacted by the business cycle.” Because they look at their industry from an insider’s perspective, the idea that they are totally unique may seem to be true. They may have come up with a unique product or service as Apple did when they essentially invented the smart phone category or they might be like the restaurateur who originates a food trend. Not surprisingly, “me toos” crop up incredibly quickly and often outdo the originators. Even more common now is the competition coming from “disruptors” from outside the industry.
There are two important dimensions to the issue of competitors that leaders must think about. First, it’s incredibly important to take the time to see your competition and the marketplace from a customer’s point-of-view as best you can. If you ask a potential customer whether or not you have competition, they will absolutely say “yes” because their perspective include choices and options that you probably have not have considered in the mix.
Customers don’t divide up the marketplace the same way that insiders do. They don’t know and don’t care about the insider language and distinctions. They don’t necessarily see, understand, or care about the details that the insiders care about when it comes to products and services. All a customer knows is that they have a problem, issue, or pain, and they want it solved. Is your product or service easily recognizable from their vantage point as the solution at the lowest cost/value point? If not, they will move on very quickly to a competitor.
The second dimension to be concerned about is - what is your real competitive advantage? When you ask an entrepreneur what their point-of-difference vs. the competition is, it’s amazing how often the answer is quite vague and actually fluffy. Something along the lines of, “well we’re the best,” or “we don’t hard sell,” or “we have the best people.” While these features and benefits might be true, they are rarely what the customer is trying to buy.
Are you taking the time to find out why customers are really choosing your products or services, or maybe more importantly, why they are not? There are ways to get this information and it’s incumbent upon leaders to make the effort to find out these answers.
Make the effort to talk to outsiders. Ask your new employees and your customer service and sales people and be open to really hearing what they say about the marketplace. What are they hearing from your customers about the issues and problems they are facing? What are the questions they are asking? What are they really trying to buy? Learn how you can improve your products, services and how you are communicating about them. Ask people about who they see as your competitors, how those companies are reaching out to customers, and how are they presenting themselves. You might be surprised what you find out.