So often in business we think our competition is the business just like ours. And we’re going to do it cheaper and better and that’s how we’ll take business away from our ‘competition.’
Those kinds of competitors can actually be strategic alliances for us. When we look at our customers choosing to spend money with us, our competition can be something else entirely.
A story: I used to do a lot of writing for the Canadian jewellery industry. I wrote business articles for trade publications. I wrote articles on industry leaders and retailers all across Canada.
In 1988 I was assigned an article that had me calling about 40 jewellery retailers across the country, on Boxing Day, to get a report on how the Christmas season had gone for them. The picture was bleak.
Up until this point, 75% of jewellery sales would typically occur between October and December. An average purchase during that season was $750.
In 1988, though, that didn’t happen. Canadians, by the droves, had hit the tipping point and bought something else that cost $750.
Any idea what that was? A computer? A fancy game like Atari or Game Boy?
No. It was a VCR. Canadians bought VCRs in record numbers that year because their price point had dropped from the $3,500 early adopter price to $750. And it very nearly drove the Canadian retail jewellery industry into the dumpster.
It’s this simple: Your competition is anywhere that someone will spend the money that they might have spent on you. If you’re in the travel industry, your competition might very well be the hardwood flooring that’s on sale. Take the trip or fix the living room?
So when you think about your competition in your business, look farther afield than the company that does what you do.