Understanding Your Competitors to Beat ThemOct 30, 2021
Almost everyday someone comes up to me and tells me about something the competition is doing. They think we should change our pricing or our service or what we do in some way because of the way the competition is doing it. That has caused me to do a lot of thinking over the years about competition and how much we should let what they are doing affect us. We tend to think in negative terms about our competition. We tend to think they’re dumber than we are, slower than we are and they just don’t “get it” like we do. The reality is that as long as their doors are open and there are people in their parking lot, they are doing something either better or cheaper than we are. Our potential customers have chosen them over us. Understanding why that might be could be the key to getting them come back or try our services if they never have before.
What If You Had No Competitors?
One way to think about how our competition affects us is to answer these questions I learned from my mentor Keith Cunningham:
- How big would your business be if you had no competition?
- How many customers would you have?
- How much could you charge for your services if you had no competition?
The answer, of course, is that if you had no competition, your business would be as big as you wanted and you could charge whatever you wanted. If that’s the case, then our competition partially determines how big we are and how much we can charge for our services. You inherently know this is true because when you started your business one of the things you inevitably did was look around and see how many other similar businesses already existed in your area. My coaching clients break down into two categories:
- Those that over obsess about everything their competition is doing and therefore never innovate themselves or run their own business despite the competition.
- Those who never consider what the competition is doing because they always assume the competition is stupid and cannot do things as well as they can.
I think both approaches may be wrong.
The Big Question You Need to Ask Yourself
At the end of the day we need to give our customers a reason to choose us over our competitor. Why should they come to us? Specifically: What are we doing better than our competitor?
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