Click to Print

Get in the Ring

A weak economy can make you strong-if you've got the guts to go in for the kill.
October 1, 2001
URL: http://www.entrepreneur.com/article/44296

It was 1933. Charles Guth, president of a candy company, was desperately trying to get rid of a long-unprofitable product. He approached his nemesis, rival candy company president Ernest Woodruff, held up the white flag and offered to sell. Woodruff probably laughed. Guth was hawking a lousy brand with no future. So Woodruff refused, and the product lived on.

And that's why we're still drinking Pepsi.

Competition. Its praises are as plentiful as Pepsi. Typical are the words of Bill Dueease, an entrepreneur coach and owner of The Coach Connection in Fort Myers, Florida: "When a company focuses on crushing the competition, they take sight off what the real objective is-which is to improve themselves. You want competition. You have to have competition."

Dueease has a point. Competition can be your friend. But if you were to find a spiritual medium and contact Ernest Woodruff's soul, the former Coca-Cola CEO would probably own up that he made a colossal mistake in not crushing Pepsi when he had the chance.

So for those of you who aren't content to merely survive, but who want to take the offensive and obliterate the company stealing your sales, your employees and your customers, here's the first rule of crushing the competition: If a rival company is lying there on the floor dying like a little bug, step on it.

It only sounds mean. "Our attitude is that you have a moral responsibility to crush the competition," says Jay Abraham, a consultant and author of Getting Everything You Can Out of All You've Got: 21 Ways You Can Out-Think, Out-Perform, and Out-Earn the Competition (St. Martin's Press). "You have that responsibility if you care more, if you provide more value and if you revere the client at a higher level."

You don't have to go to the dark side and cut your competitor's phone lines or go into a bathroom and write, "For a good time, call [insert competitor's CEO's name here]." But if you believe you're Luke Skywalker and that your rival makes Darth Vader seem like a stand-up guy, then grab your lightsaber and get ready to destroy the Death Star.

Battle-Ready!

There are many ways to slaughter competitors. You can slam them in your ads, highlighting their weaknesses and your strengths. Or, if you run a retail operation, you can move across the street from a rival and lure its customers away.

In-your-face tactics are one way to take on your nemesis, but experts agree there's a better way: Creep up on the creep. Or, to quote that famous rabbit hunter Elmer Fudd: "Be vewy, vewy quiet."

Use your marketing plan to map out your competitive strategy. Read our marketing plan tutorial for help.

"Next to a battle-less victory, this is the ultimate way to fight," says Mark Joyner, CEO of search engine Aesop.com and author of the e-book 1,001 Killer Internet Marketing Tactics. Joyner, who worked in military intelligence for the Army in the Korean War, says, "Surprise is of such supreme importance that it makes strength almost insignificant. A small man with a knife could kill a Mike Tyson, if Mike didn't see him coming."

Stalking your competition is a matter of "business espionage," says Ray Vargo, associate director of the Institute for Entrepreneurial Excellence at the University of Pittsburgh. He contends you can't beat competitors if you don't know anything about them.

Send fake customers to your competitors, says Vargo, and have them register bogus complaints. "See how they react to the demands. Sometimes you can find out more about that business than the owner would probably like you to know."

Then take the battle to your competitors' suppliers. Talk to them, and find out how much volume your competitors are ordering from them and how often they send shipments. Park your car outside the competition's place of business and observe how often customers visit and how frequently suppliers make their rounds. "If you're not doing this on a regular basis, then you are not keeping in touch with the market," says Vargo. "You need to evaluate your competition consistently. You need to find out what materials they have [and keep] close tabs on their marketing efforts."

The Attack

Once you have the inside information, use it. That's what Andrew J. Birol does best. Birol, 42, owns Pacer Associates Inc., a Cleveland-based business consulting company, and is the author of Focus. Accomplish. Grow. The Business Owner's Guide to Growth (Pacer Associates). He seems like a nice enough guy, as long as he's on your side. His strategies may not destroy a competitor, but being on the receiving end of them is likely as pleasant as enduring a shark attack.

One of the oldest and best tricks, Birol says, is to "selectively raise prices on high-maintenance, low-margin customers." If you have an undesirable client, jack up that customer's prices 25 percent. "Five or 10 percent, they might understand and try to absorb," says Birol, "but 25 percent is tantamount to telling your client they have ugly children. They'll go."

And to whom will they turn? Your rivals, of course. "While your competitors are rushing in-and regretting it later-you can concentrate on poaching their customers," offers Birol. "If you can move the bad apples onto your competitor and ultimately raise the competitor's costs, it's almost like infecting them with a bad virus." Ouch.

Another strategy, says Birol, is "the fake-out." Birol worked with a manufacturing firm that learned its competitors had been spying on the company by counting the number of trucks hauling products from its warehouse. (See, this sort of thing happens all the time.) Birol advised the company to "fool [the competitor] into believing their new product was a runaway hit." They scheduled 30 trucks to leave the warehouse every day, instead of their normal four. So the competition put its workers on extra shifts to make more-and ended up with a factory full of products nobody needed.

And once, one of Birol's clients, a chemical firm-let's call it Company A-had a traitor in its midst who was feeding secrets to Company B. Since the traitor had signed a contract stating he wouldn't give away trade secrets, Birol's clients made certain the employee would be able to steal an important formula for a new product. Shortly afterwards, the employee went to work for the rival firm, and the stolen product hit the market. "The lawyers started licking their chops," says Birol. Company A sicced its lawyers on Company B, which learned that it couldn't manufacture the product without going to jail; meanwhile, Company A was able to hit the market with its original and legal formula and make a fortune.

So is there a trick to coming up with these tricks? "You know what I think it is?" says Birol. "Recognize that you're dealing with people's egos more than you're dealing with rational behavior, and structure strategies that will provoke-and, frankly, fool-people who are likely to let their egos get in the way of their brains."

Case in point: One of Birol's clients worked with a manufacturing rep who declared, "We won't let you carry this line unless you drop all competing products." The client could have bowed to the rep's wishes, but instead it created "a shell company," says Birol. The company had its employee pretend to quit and strike out on his own, assuming (correctly) that the rep would run into the arms of the newly independent company. "But what do you know?" says Birol. "Eight months later, our [employee] decided to rejoin the company and fold his company back into this one." The rep, having already established ties to the employee's new company, was forced to bring its account to the parent.

RANDOM TACTICS IT'S GOOD TO BE BAD

So you're desperate to obliterate your competitor? Here are two suggestions-but check with your attorney before proceeding.

  • Make your competitor see another type of green: If your nemesis is polluting the skies or planning to raze a meadow to build a warehouse, start a grass-roots campaign against the company. Talk to the press; place ads. Get the public angry. Get them to hate your competitor and love you for caring about the woods and the sky. Talk fondly of Thumper and Bambi, and of your children's health. Weep openly.
  • Sacrifice your family: When your least capable, most bungling family members call you to ask for a job, release a heavy sigh about the shaky economy and then cheerfully tell them about the job openings at the competition.

Bury the Enemy

You don't have to be quiet about your attack. Maybe that's not your nature. It wasn't the approach Paul Hanlon, 43, took. Hanlon, author of Strategies of an Ordinary Multimillionaire: Simple Ideas to Achieving Magical Success (Paul Hanlon), made no secret of his desire to destroy his competition.

For more than a decade after founding Folio, a Massachusetts-based trade show exhibit company he sold four years ago, Hanlon watched competitors topple, simply because he hired away their top talent. "People want to work for companies that are totally committed to making the employee look good," maintains Hanlon, who for years wasn't the highest-paid employee at his own company. "My employees came first, my vendors came second, and my clients came third," he says. "I promoted it; I preached it; I fired clients who were abusive to my people." So top talent was more than happy to work for Hanlon, generating sales of $30 million and weakening his competitors.

But Hanlon stresses, "I didn't really put people out of business as much as they put themselves out of business."

He has a point. As long as you're not cutting competitors' phone lines or framing rival CEOs for murder, your guilt over putting opposing businesses out of business should be minimal. Because in the end, if you crush your competition, it means you did something right. And when you're running your halo-cleaning business in that great corporate world in the sky, curious entrepreneurs won't be sending a spiritual medium your way, only to shout, "What were you thinking?!"


Normally, Geoff Williams wouldn't even crush a fly. He's a freelance writer in Cincinnati and can be reached at gwilliams@cinci.rr.com.

Contact Sources