As per Webster, the definition of competition is “the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.” As such, for those of you who engage in competition, it can prove to be rather advantageous as, ideally, it helps make your offering innovative, efficient, and durable. It also ensures that the customer pays for your offering’s intrinsic cost, while also securing value for money.
Competition thus seems normal in essence- but is it worrisome, and does it warrant taking negative actions to get the upper hand? After all, fear of competition in a common factor among businesses around the world, with it often being embedded as a key point in their strategic plans. But while competition may well be a factor to reckon with, it must not be a source of fear for businesses either.
Businesses strategies are formulated based on foresight and foresight with many facets to consider. Economic forecasts, market trends, labor and commodity markets, government regulations, technology, and competition play roles. These have to devise resilient strategies where confidence, not fear, rules. Any negativity, be it competition risk or market transformation, should be factored in advance and relevant changes made to manage it, instead of devising defensive posturing.
Wisdom demands businesses have got to rise above the competition, not rise against it. Fear of competition or stalking competition is not the right approach, and it is outdated. A company must focus on its internal improvements, leverage its strengths, and introspect on learnings of the past. It also requires exploring new grounds, innovating, and transforming to stand out, and giving customers insights and experience. Whilst competition case studies may help, one must not find themselves over-possessed with competition syndrome.
Preparedness for a business’ proper sustenance requires envisioning and planning, and a careful consideration of all factors. This includes organizing resources and people to execute plans and managing the aspects to run the business in a robust mode. But often, the company and people operating it go astray in following competition, with their overzealous pursuit of the same often resulting in many failures. Past and present market situations tell this story- be it in cola or in telecom, the list is endless, with there having been no apparent benefits in sight for most. These misadventures have cost them dearly, and they have mostly been counterproductive.
Competition should ideally be a positive force where each party can learn from failures and successes, but these need scrutiny. However, many times, competition is used as a source of business benchmarking by factoring in select indicators, instead of comprehensive reviews such as turnover, class, size, history, business category, industry, and others. One must learn to draw exact parameters before any comparative exercise to conclude with credible competition data and figure out why one is better than the others.
I personally tend to give a very low priority to the competition risk, especially as I see people reacting very negatively to competition, either in aggression, fear, or defense. I find these fears unfounded and unnecessary. There should be no fear from competition unless you are in a business with limited market reach, or you are simply too small a player in a domain where market forces are pushing for consolidation. Even in such a situation, innovation and transformation is the way. Prudent businesses need to map their strengths, weaknesses, opportunities, and threats (SWOT) analysis, and build a resilient model based on industry best practices.
At the end of the day, one needs to learn how to handle competition- do not fight it, or ignore it. Give the client their desired value, which is not money alone, but a holistic offering. Build your value proposition, and stand out. Tell your story, and add more personality to your brand. It should be engaging and impactful, but it should also trigger an emotional response to bond. Above all, care for your customers and make retention, not just customer acquisition, as the cornerstone of your business development strategy. It shouldn’t be all about profits; you should also care about customer retention, because, without your customer loyalty, the business won’t sustain.
More and more companies are trying to highlight the importance of creating strong customer-brand relationships, because you have to establish some form of trust if you want them to stay loyal to your brand. Once you start working toward learning more about your customer profile and their needs, and, above all, pricing, you will also provide optimized value. If you want to stand out and defeat your competitors, meeting your clients’ needs is pertinent above all- aim to provide value for money with the focus being on meeting standards and offering quality services, as opposed to only adjusting prices.
In my current role as CEO, my organization has more than 95% customer retention whilst also maintaining a 20% compounded annual growth over one decade. We achieved this as we knew how focusing on strategies will create stronger bonds with our clients, and we made this our core competitive advantage. We knew that stagnation adversely impacts, and we embarked on a continuous transformation that helped deliver a unique experience and get positive feedback from our clients.
There’s always going to be someone with a better product or service. If you put more effort and do your best to give your brand a unique service offering, you can do a much better job handling competition and achieving solid customer retention.
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Original source: Entrepreneur