Competition is an inevitable part of the business world, for businesses of any size. It is not a necessary evil, but rather an important part of the business ecosystem. In fact, competition can be an effective tool for growing and improving your business. Don’t believe it? Here are 9 reasons why it is important for companies to have competitors.
1. Provides Reassurance
The presence of competition means that customers have the option to choose either your business or another business. When there is competition, you know that customers are using your business not because you’re the only one out there, but because among the others out there, you appealed to them most. Competition is important for your business because it provides reassurance that you’re getting customers because of the quality of your products and services.
2. Reveals Your Secret Sauce
When you stand out from your competition, it’s not that you are so different; it’s that despite being so similar to other businesses, you have distinct qualities that set you apart. Every auto mechanic fixes cars, all yoga instructors teach yoga, and all photographers take pictures. But, it’s the special qualities of your business that set you apart from the rest.
Maybe you provide the same services as other companies but at a quicker pace, or with more personalization, or through a unique approach. Perhaps you provide one additional service that your competitors do not. Competition is important to your business because it enables you to identify your specific and unique traits that are appealing to customers. Identifying and harnessing these traits will enable you to market your business more effectively and bring in new customers.
3. Enhances a Good Online Presence
By increasing your online presence, you can rank higher than your competitors in search engine results pages. Showing up on the first page of a Google search when there are only 4 businesses like yours is easy, but being on the first page of Google when there are 40 businesses like yours is hard. The more competitors you have, the more power your ranking holds.
4. Helps Customers More Quickly Identify You
Competitors aren’t always detracting from your business. In fact, at times competitors will actually help customers to more quickly assimilate information about your business in their head. If a potential customer stumbles upon your business online, they may not always know what you do—especially if it’s not obvious through your business name. However, if your dog walking service called Happy Trails is grouped in with a competitor called Sarasota Dog Walking, whose name is more familiar to them, or whose business name clearly states their service, customers can more quickly identify who you are and what you do. This association with a competitor helps people recognize your business in the future. It is important for companies to have competitors because they boost your familiarity factor.
5. Builds Loyalty
The more a customer chooses your product over a competitor’s, the more likely they are to continue choosing you. The more times a customer chooses you, the more grateful you are for their services and the better you want to serve them. The better you serve them, the more they purchase your product.
This positive feedback loop of customer loyalty creates long lasting customer relationships and builds a strong bond that can outlast any business challenge. If a competitor’s prices drop or your business has a slip up, loyal customers will stick with your services, not because you asked them to, but because they wanted to. It is important for companies to have competitors because while they may not always increase your quantity of customers, it is sure to increase the quality of your customers and their degree of loyalty toward your business.
6. Breeds Brand Evangelists
Competition doesn’t just build loyal customers, it provides opportunities for those customers to advocate for, support, or defend your brand. Brand evangelists love your business so much that they want to tell the world; and if you give them the opportunity to, they will.
Online reviews, social media platforms, and customer testimonials are all examples of such opportunities. However, one natural opportunity is the mere existence of a competitor. Upon seeing someone using a competitor’s service, a brand evangelist is very likely to tell that person about your business. If they see someone advocating for a competitor, they are highly likely to defend your brand—they can’t resist! It is important for companies to have competition because without it, brand evangelists have fewer triggers for supporting your brand. In addition, the more opportunities they have to express their affinity to your brand, the stronger that affinity will become.
7. Allows for Market Research
In the world of business, there will be instances in which a customer leaves you for a competitor, or leaves a competitor for you. When either of these instances occurs, learn about what specifically caused the customer to change businesses. Gathering this information enables you to better understand your target audience, better serve their needs, and make adjustments as necessary. It is important for companies to have competitors because they keep you on your toes in doing market research. Who knows, you may even find your niche market this way!
8. Opens Your Eyes to Improvement
Customers don’t always know what they need until they see it, and sometimes it’s by a competitor that they see it. Loyal customers who want to continue utilizing your business will provide useful feedback around these needs. Instead of walking away because you don’t have what they need, customers can know what to ask for and what to request, based on what they see competitors providing.
Similarly, you might not know the next step in improving your services until you see a competitor do it, or until they do something that inspires a unique idea for your business. Competitors are useful for introducing new ideas and perspectives within your industry, to help you improve your brand and better serve your customers.
9. Teaches You New Skills
There is much to learn from your competitors. If you’re having difficulty in any particular area of your marketing, find competitors who are doing it well and learn from them. You don’t want to copy them, but there is nothing wrong with adopting certain practices into your own plan where it makes sense.
On the flipside, you can also identify where competitors are falling short, and be the one to satisfy that need. Mistakes are one of the best ways to learn, but who says you have to be the one to make the mistake? Look at online reviews and learn about what mistakes your competitors have made, so you can avoid making them in the first place.
Although it can be scary, embracing competition in business may be one of the best moves you can make. It is important for companies to have competitors because it is through them that you can get new ideas and perspectives, learn how to stand out, and progressively grow your business. Use your competitors as a catalyst for change and watch your business succeed.