Every business has its competitors, but picking and choosing who you need to compete with is more important. You could be a local coffee shop that is independently owned and operated, but down the street is another independently owned and operated coffee shop that is also doing a good business. That shop down the street has loyal customers that are not the same as yours, but you consider them competition. Your customers prefer your brew of coffee and their customers prefer theirs. One day a Mega coffee shop chain opens up on the other side of the street. Do you fight both competitors or do you ally with the other independent shop down the street to keep your business?
Small business owners and entrepreneurs have heard it a million times – that their business or solution should focus on a niche and a specific high-value group of customers. Once you have found your niche and know your competitors’ niche, you may find it easier to work with them to help both your businesses to compete against larger competitors who are trying to accommodate both markets – simply because they have the money to do so.
You can also learn from your competitors, without ever speaking to them. Reading some of their customer online feedback can make you think about some of the similar problems your customers may be having with you, but have not posted their comments publicly. If their customers are complaining that their are not enough red items on the shelf, take a look at your shelves and see if you too may get that similar complaint.
Be careful not to seem like you are trying poach your competitors’ turf or niche. If they have a stronghold in certain areas of the market you are working in, and your products don’t offer differentiated value to a customer, don’t try to over-market to those groups. Your objective should be to train customers that your offering will better fill their needs than those of your competitor, without the hard sell and animosity. When a prospective customer sees your type of product or service as more useful to them, they are more likely to view your approach to a product or service as more legitimate and credible. This can make a prospect more likely to become your loyal customer.
As a small business owner, talking to your competitors can sometime be good for both your businesses. Carving out your niches and helping each other out can help fulfill the needs of both your target markets. Why not sit down for a coffee with your small business competitors. Just maybe you can share some resources for better economies of scale in the ways you compete. Maybe you can work together to gain a bigger piece of the overall local market from the bigger players.
Even in the office space category that we thrive in, there are large giants who try to push out the smaller players in the city where we offer our virtual office services and office space for rent. Quite often, these larger players are trying to either buy or out-price the independent operators – so they can not only raise prices in the absence of competition, but also control any future competition.