I run businesses. Have always done that. Did that in the past, doing it today, and will continue doing that. And every single time we have tried doing something new, there are always questions that are centered around the competition.
Why do you think you will succeed where others have failed?
Don’t you think you are a few years too late? This has already been done by X.
There seems to be nobody else addressing this market. Don’t you think that’s because this problem doesn’t need to be solved?
Each and every single one of those questions is valid, and we need to ask ourselves those questions all the time — when we have just started to think of the business, when we have started doing the groundwork, when we breathe! Yes. All the time. But it doesn’t need to be the focal point of our thought process. Scratch that. IT MUST NOT BE!
CONSUMERS, NOT COMPETITORS
Your business needs to do what will add value to the life of your consumers. It needs to do it in a way that will leave the customers with a smile on their face. It needs to achieve the ‘goal’ of ensuring that the customer, by default, thinks of you when he is contemplating another transaction in your domain.
That’s it. That is all that matters, and therefore, that is all that you need to stay focused on all the time.
In one of the businesses I worked with, the adwords team would be obsessively tracking what our biggest competitors were promoting. If the competitors had a product that was priced lower than ours, all hell would break loose. The sole focus would shift to matching up to that price. After all, why would a customer buy with us if he/she is getting the same product cheaper somewhere else?
And that is absurd on the face of it, isn’t it? If price is the only reason a customer has got to transact with you, then that is a competitive advantage that would never hold up, would it? There could always be someone with pockets deeper than you, and in an all-out price war, there are no winners. None whatsoever. No, despite what it may seem, even the customer ends up losing in that war since soon the business that could have added a lot of value to his/her life would have gone belly up and he would be left with businesses that have their foundation so weak that his entire buying experience would go for a toss. The entire industry suffers in a war that’s driven solely on price.
Take the example of TATA Motors. The brand was launching a new SUV, and it was doing so a little bit too late as compared to its competitors. Did they price their products competitively? Yes, they did. But that is not what they focused on. They aspired to give customers a sense of comfort and safety and pushed for the coveted “safest SUV” spot. The first time, the car received 4 stars on NCAP crash test. That already made it India’s safest SUV.
That gave the brand something to talk about. They were able to talk about a key concern any new car buyer would be having. They used the messaging everywhere, even releasing a video of the Crash Test and inviting their target audience to watch that. It did wonders for the brand, and it made sales better than expected. But they were not done. They kept on working further and managed to become the first Indian car to receive 5 stars in NCAP crash test.
While brands were obsessing about what their competitors were doing, TATA Motors was keeping its head down and working on improving on a key aspect that was helping it connect with its consumers.
Now, this is the question I pose to you. When a consumer is thinking of Nexon because of the safety it offers, do you really think he would be worried about the few extra dollars he could have saved by going with a competitor? Probably not. And that is the impact you drive for the business when you are focused on your consumers and not your competitors.
COMPETITORS ARE AN EASIER TARGET
I have been asked this question a lot:
If focusing on consumers is the only thing that matters, then why do businesses not do that and focus on their competitors so much?
Well, two reasons.
1. Fear. We are always afraid of losing our market share, our customers, our growth trajectory to a predator. And with some businesses often deploying cheap, dirty tactics, that fear is not completely unfound. One of the most recent examples of a dirty tactic was called out by Jason Fried when Basecamp ran an ad on Google focused on how Google is allowing competitors to run ads on brand keywords.
But how did Basecamp become the #1 tool preferred by entrepreneurs and businesses everywhere for their project management needs? They did so by staying focused on what was working with their consumers and what wasn’t.
2. Competitors are an easy target. If you all you aspire for is to beat your competition, you would be able to do that. Most of the time, with quite some ease. There is a defined level when it comes to what the competitor is doing. They raised the bar, you just need to reach that, or overshoot that limit. It is a tangible, measurable target, and most of the time, it looks quite an achievable feat, to begin with. The problem is, once you beat the competition, complacency sets in. You wanted to do something, and you did it. And it becomes an endless loop. You are always chasing the customers. It is always measurable, it is always beatable. Put that in contrast with meeting up to the expectations your consumers have of you. Your customer is one tough cookie. Difficult to please, and the more you keep on doing for them, all you manage to do is raise the expectations even higher. But that is a good thing, isn’t it? We have high expectations of people we trust — whether in their abilities, or their integrity. And when they let us down, we feel disappointed. But that’s because in those specific areas, we probably put them ahead of anyone else we know. And as a business, isn’t that the whole intent we have been gunning for every single day?
BUT DO BE AWARE OF YOUR COMPETITION
I am in no way suggesting that you should completely ignore your competitor. That would be a mistake! You should be aware of their existence, mindful of their presence, respect the good that they do, and learn from the mistakes they make. But as far as what you need to do as a business is concerned, don’t let your strategic decisions be driven by your competitors. You would be doing a disservice if you do that — both to your customers, as well as your business.
So. No matter which business activity you are involved in at this very moment, just think of what you need to do for your customers.
You take care of the customer, the customer will take care of the competitor for you!