One of the constants in our business is competition. Very occasionally you find a company that has established a monopoly position, but for the most part, if the market you’re serving is a real market with real customers with real needs, you either have competitors already, or you will very soon.
Yet so many companies struggle to determine how to respond when a new competitor emerges. They are worried that this competitor will somehow make their product offering obsolete, or undercut their pricing, or one way or another steal away their customers.
As a result, many companies resort to a cat and mouse game with their competitors. They stress over each other, they chase each other’s features, and they try to market against each other’s weaknesses. All of these responses to me only serve to distract them from what they really need to be doing.
What these companies don’t really understand is that customers don’t leave us for our competition; they leave us because we fail to meet their ongoing needs.
Please consider this. Think about the companies you know that that thrive in the face of many strong competitors. And think about the companies you know that have lost their customers.
I try to get the companies that I work with to focus their energies on providing real value to their customers. Unless they do this, their customers are probably just waiting for a good opportunity to leave. On the other hand, when your customers know that you continuously strive to deliver great solutions and great service, it generates true loyalty. The kind of loyalty that you’ll need when you make mistakes, or when new competitors emerge.
It is amazing to me how much energy goes into chasing competitors, yet how little energy or resources goes towards addressing the very real concerns of customers.
It is true that markets evolve and our customer’s needs and expectations can change over time. Especially with major technology shifts, customers that were once happy with your product may no longer be satisfied. A common example is when customers now expect mobile access.
While many product leaders and company execs stress out too much about their competitors, I also find many that completely ignore competitors. Usually because they assume their competitors can’t possibly be as smart as they are. These people also I think miss an opportunity.
I’m a big believer in having product leaders understand all of the players in their market. I think you can learn valuable lessons from all of your competitors.
My suggestion is that the product leader should study each competitor and identify the three key things that they think the competitor does that provides real value for their customers, and the three major areas where they think the customer’s needs are not met. The strengths and weaknesses may be in the functionality, or it may be in their policies, or their customer service, or pricing, or anything else. It’s important to take the holistic view when evaluating competitors.
The key is to constantly drive value for your customers. It’s really the only way I know to competitor-proof your business. So stop chasing your competitors and start focusing on providing real value for your customers.