Competition is one of the most crucial environmental factors for the success of a business. Most entrepreneurs only enter the game when they feel the competitive field is advantageous -- either because there is no competition for a target market, or because the competition can be easily overcome.
Unfortunately, even the most “blue ocean” opportunities frequently fill with new competitors somewhere down the line. If it was a good idea for you, it was probably a good idea for someone else, and they probably have their own spin on it.
So what happens when your business becomes threatened by such a competitor? There are actually 10 distinct ways -- maybe even more -- you can use competition to your advantage.
1. Find a new target audience.
Let’s say you’ve targeted business professionals as your demographic of choice, and now another company has moved in on your territory with a product that suits them better. Consider the advantages of switching to a new demographic -- you can do this by adjusting the branding of your product, releasing a new product for the new niche or simply changing your marketing strategy. However you approach it, you’ll receive new business and stay afloat.
2. Release a new product or service.
This one may seem obvious, but try thinking about it in abstract ways. Instead of inventing a new product or designing a new service entirely, are there new amenities you can add to your existing lineup? Consider new service plans, new “levels” of subscription or add-ons for a tangible product that make it slightly more useful than your competitor’s version.
3. Improve your competing product or service.
This should have been your first instinctual go-to. If a competitor is threatening your business, become objectively better than that competitor. This may seem more challenging than it actually is, depending on the size and capabilities of the competitor. Can you use a higher-quality material? Can you make your software faster? Can you offer better ongoing returns? This isn’t always possible or easy, but it’s worth considering.
4. Adjust your pricing.
This doesn’t necessarily mean cutting your prices. You can find alternative ways to price your products to appeal to more customers as well. For example, you can offer payment installment plans for big products, or create new minimum subscription terms for new customers. This can widen your potential market reach and imbue you with a quality your competitor doesn’t have -- flexibility.
5. Create a loyalty or rewards program.
Brand loyalty is hard to come by these days, but a solid rewards program can give it to you. For example, you could give your users bonus points or discounts based on their level of engagement with your brand, such as repeatedly purchasing items or logging into your software. Advertise this, and let your customers know how appreciated they are.
6. Step up the customer service -- and flaunt it.
Customer service makes a big difference, so make sure yours is exhaustive and foolproof. Make it easy for customers to resolve disputes and get questions answered, and flaunt that customer service by emphasizing your user reviews, testimonials and maybe even case studies.
7. Experiment with a new marketing campaign.
Now’s the time to experiment with something new. Add a bold twist to your brand, pursue a new marketing channel or find a tangential way to reach your audience. The key is to do something different -- and make yourself stand out from your competitor. Answer the question, “What can make you unique in the field?” and begin applying that to your overall strategy.
8. Step up your organic and social visibility.
I mention organic (search) visibility and social media, because they’re easily accessible and reasonably inexpensive strategies to pursue. Stepping up your game in search engine optimization, social media or both can dramatically increase your online visibility, and if you’ve been in business longer than your new competition, you have an inherent advantage.
9. Call upon your experience.
If your competitor is new, you have a critical advantage -- experience. Show it off by naming your major clients, publishing case studies of your results and emphasizing your years in business in all your promotional materials. It could give you the edge you need.
10. Work together.
If you can’t beat them, join them. If both your companies offer similar products to a similar market, why not combine your resources and start dominating the field together? For the independent-minded entrepreneur, this may feel like admitting defeat, but consider the practical advantages of an alliance before dismissing the possibility.
I’ve given you the tools and direction you need to come up with a new plan -- but the actual ideas and solutions are up to you. Put your creative faculties to the test, and don’t be afraid to explore new options. The dominant competitor will be the one who appears to be the best to a target consumer, so you can work on your quality, visibility or even your definition of “target customer” to reclaim that distinction.
Good luck -- and don’t be surprised when this happens again. New competition is always lurking around the corner.
Related: 8 Ways to Ensure Market Domination