Last week I was discussing business with a founder of a company in the aviation industry. He is now a primarily hands-off owner, having brought in a CEO to run the company. The richest part of our conversation was related to his competition. This businessman talked about the ways his company’s competition has helped them grow their business. He also spoke of how he has learned the importance of loving the competition.
When not to love the competition
Sometimes in business we need and want to work at squeezing our competition out, or what some would call “crushing” the competition. Harken back to Nike’s very first mission statement, “To Crush Adidas.” However, there are times that crushing or eliminating our competition does not serve our business well at all. Sometimes it is our competition that helps us take a greater market share.
Other times we need to be loving the competition
One way our competition can help us is by doing the work we don’t want to do. If we are focused and clear on what our best products and services are that make us the most money, we can let others in the sector do the rest. Our competition can also help us if they aren’t as good as us, which then encourages customers to change their loyalty.
I will provide an example of a company I started working with in December 2019. The CEO had met me earlier in the year at an event I spoke at. The phone rang and he said, “remember me, I spoke with you after your presentation at the Sandman hotel.” I did remember him – phewf. He was a bit panicked, as he had found out through an informant that his company’s main competition was going to be bought up by a very large organization with very deep pockets. He needed a strategy. I was not able to fit him in my coaching roster right away, but we agreed I would start a couple months later but would at least do a first consultation so he could get some clarity. He flew to town and we met in his hotel room for a few hours on a Saturday morning for an urgent consultation.
Strategy on how to love the competition
As I gathered all the information, we brainstormed a range of things. Our plan became to simply service the heck out of all current clients. We were going to refresh the company brand promises; particularly the ones related to quality, customer service, and responsiveness. We knew we would need to work hard to maintain our existing business. We watched our market carefully and continued to gather more and more intelligence. Eventually we became aware of the of the key leadership changes that were happening with this newly purchased competitor. They were losing a few very key personnel from their plant. We knew enough to conclude that this would negatively impact their production and quality.
Results of loving the competition
Fast forward to 8 months later and this competitor is serving us well. We are loving the competition! Their quality has dropped off, and we are slowly, a buyer at a time, taking some of their market share. We have considered many different strategies, but keep coming back to the fact that as long as we quietly do great work, we will continue to take market share from this competitor. That is exactly what is happening. This is B2B sales, and more and more businesses are coming to my client, as they are becoming less and less satisfied with the primary competitor. Now the competitor has dropped its pricing to try to get clients back. We have chosen not to drop our price, but rather focus on quality. June and July of this year were the best months ever, and we are growing rapidly. We are doing this while letting the competition simply drop off a little at a time. W are staying the course, and appreciating this competitor more and more as they drop the ball. Frequently we have had clients come and say, “we no longer want to be supplied by _______ and want to give you a try.”
We love this competitor, because they are driving our business up by not delivering in the way we can deliver. We have, in less than a year, gone from having approximately 30% of market share to close to 50%. This will be the most profitable year ever, with more growth to come.
Cameron’s Call to Action
1. Carefully assess the competitive space you are in and identify which competitors could be hurting you and which ones might actually be helping.
2. How can your competitors help you? Do you have some less profitable business lines that could be carved off for someone else to take care of?
3. Let your competitors do the work you don’t want to do. Then you can focus on what you want to do.
4. Plan carefully your strategy related to each of your key competitors, because it may include boosting them up, not crushing them!