Amanda Dai loves competition. In an excellent blog post on Huffington Post, she talks about competition in a way that sets her apart from a large number of people, including many of my tech industry colleagues. For many of us, competition is the enemy…and we are at war. For others, the competition is someone to be (too) closely watched…so much so that they dictate our actions. “Price Shack has the Mega 456 on sale?!? Drop our price immediately!”
But here is why you should accept…and even appreciate…your competitors…
In Amanda’s well-written post, she’s actually talking about a sports competition – her first after coming back from an injury. Even though she’s very young (a teenager), she created an interesting and fun story…you see the competition through her eyes. There is even a surprise twist at the end – but I won’t spoil it here, you’ll have to click over and read it yourself.
But Amanda’s post got me thinking about the topic of competition. Years ago, I worked at an audio specialty retailer in a college town. There were three audio specialty retailers in a 2½-block radius. Competition was, to put it mildly, brutal.
A tale of three specialty retailers…
All three retailers carried high-quality, upper mid-fi specialty lines that competed head-to-head in the marketplace nationally. All three hired experienced sales teams that underwent regular product training. One of the three was a local outlet for the national electronics chain Tech Hi Fi, which gave it a slight – very slight – edge in advertising funds.
It was the heyday of hi-fi and we fought over each customer. Yes, customers ruthlessly cross-shopped. We had to not only know our lines – but we had to know their lines as well – so that we could legitimately pitch the advantages of our brands.
Every day was a battle…
With so much good hi-fi available in one convenient location, people would come from miles around the state to shop those 2½-blocks. We’d bemoan our lost deals – and high-five our wins.
Then…a recession hit. And that changed everything…
In a matter of months, one of our competitors went out of business. Another moved away to a new (cheaper) location in the same town…but a long way away. Eventually, they too went out of business.
People would come in and say to us: “You must be so happy. You have NO competition.”
But we weren’t happy. Our sales were off dramatically. And it was then that I learned about the value of competition.
Competitors help you in five key ways:
- Competition stirs the pot. When multiple competitors are promoting in the marketplace, everyone benefits from the increased floor traffic the collective promotions “stir up.”
- Strong competitors force you to “up your game.” You had to be on your toes if you wanted to get the deal. Our sales staff was attentive from the moment a customer walked through the door, courteous, knowledgeable, gave great demos, and were good closers.
- Competition spurs teamwork. Everyone on the sales team wanted our dealer to “win” every deal. Consequently, we taught each other how to best demonstrate various systems, shared configurations that worked well together, and discussed the best demo material…in short, it was “us” against “them.”
- Competition creates innovation. We were constantly wracking our brains to create new system packages, promotions, and demo techniques. Hardly a day went by when we weren’t putting our heads together to come up with something new to win more deals.
- Competition builds better products. Our competitors gave us the ammo we needed to go back to our vendors when their products were not competitive. We had the hot info straight from the front lines thanks to our competitive head-to-head comparisons. And we had the passion of lost commissions to motivate us to “encourage” our brands to do the right thing to get more competitive.
When we lost our competitors, everything changed. Fewer people were walking in the door due to dramatically less market promotions. Our close rates went down because our sales crew didn’t feel like they had to work as hard…the customers weren’t going to cross-shop anymore. Our sales declined dramatically.
What we needed was…a few more competitors…
Do you love competition? Think I’m full of it? Leave a reply below and let us know what you think about competition!