You are likely to find that most businesspeople are competitive. Especially in marketing, people want to win.
Business has always been competitive. That’s one of the expectations of a free market system. Businesses compete with one another for customers.
And despite most typical assumptions, there are a number of different ways to compete. Most people only really think about two ways to compete:
But there are many more, often obvious, ways to compete. So let’s review those here.
Compete on Quality
Everyone knows you can compete on quality. If you have a better product or service than your nearest competitor, you are likely to take market share from them.
Choosing to compete on quality means three things. First, you believe that you can consistently outperform when it comes to the quality of your product or service. If you didn’t, you would find another way to compete.
Second, it means that you believe there is a demonstrated desire by consumers for this higher quality. And third, you believe in your ability to communicate your higher quality to those consumers.
The key is, if you compete on quality, you must always be one step ahead of your competitors, those that already exist and any potential newcomers.
Compete on Price
There are always companies in every industry that will compete on price. It is the oldest form of competition. If I think that I can offer the same thing that you offer, but for a lower price, I will. I know that all other things equal, the lower price will always win.
But as successful as many companies have been focusing on price, this form of competition comes with high risk. Why?
What happens if your competitor lowers their price? What happens if a new competitor figures out a way to market an even lower price? Price wars are never fun and often lead companies out of the market entirely.
If you decide to compete on price, you must make sure that you can always offer a lower price than your competition.
Compete on Audience
To compete on audience means that your target market is going to be different in some way from that of your competitors. Perhaps you have recognized that there is an under-represented part of the market, one that is not currently being addressed by your nearest competitor. Or perhaps there is an alternate use for your product that you think will appeal to a new group of consumers.
Competing on audience requires you to focus your efforts, designing your marketing and product for a specific subset of the larger market. If you can serve them better than your competitor, you might either steal market share or create a new slice of the pie that is yours and yours alone.
Compete on Brand
Branding is a way to establish your company in the market – a way of connecting with customers beyond just your products or prices. Large companies love to compete on brand, and we’re seeing it more and more for well-funded startups.
Competing on brand is an attempt to register your company’s name in the mind of prospective customers, so that when they have a specific need, they think of you. If you are successful, it can lead to success even when your price isn’t the lowest, or your quality isn’t the best.
The problem is that this strategy is often very expensive, and only rarely does it succeed. If you can’t compete on one or more of the other options listed here, attempting to out-brand your competition is incredibly risky.
Compete on Service
Sometimes people just want to do business with a company that is going to treat them well. When your price is not the best, and when the quality of your product is not discernibly better than your competition, you can compete on service.
Companies that compete on service focus on being a pleasure to do business with. This means they make it easier to get support, going out of their way to make their customers’ lives simpler.
Companies that successfully compete on service have grown in recent years, focusing on customer loyalty through a more personal touch.
Compete on Location
We often think of competition on a national, or global scale. But companies can and do compete locally. And you don’t have to have a physical presence to do so.
Using any of the above criteria, you can focus your efforts in one market or another that gives you the best chance to win. This is just like an alternative version of the Compete on Audience concept, except that in this case the distinct criteria about your target market is where they live or work.
To sum it all up, it is important that marketers and business managers of all stripes are aware of the many different ways to compete and succeed in the marketplace. You don’t always have to be the best, or the cheapest, to win business. Your company can succeed if you know what you do well, and focus on making that your competitive advantage.