Small Business Revolution by Barry C. McCarthy

Author:Barry C. McCarthy [McCarthy, Barry C.]
Language: eng
Format: epub
ISBN: 9781119802662
Publisher: Wiley
Published: 2021-09-13T00:00:00+00:00

Principle #3: Know Your Competition and Find a Way to Outclass Them

I've talked a little about this before, and I'll make some different points here. First, just as your customers change, so does your competition. Therefore, you'll never be done with this process. It's ethical to visit their websites and even sign up for their newsletters, because it's not unethical for them to do that to you.

As much as it feels right to stick to your own knitting and not be looking at what competitors are doing, that's a mistake. Any customer who is being prudent will do research, determine who are the best suppliers of products and services, and then make a judgment about which ones get the business. That's why Consumer Reports magazine exists, and why Amazon has made so many billions off its system of reviews. People want help with product comparisons.

Yet think about when you've been a customer and you've asked a business something like, “Could you please tell me how your roofing service compares to other companies?” You'll often hear: “Oh, we have a policy of not criticizing our competitors.” What a cop-out! That's usually when I turn around and leave. I didn't ask them to dump on the competition, but instead to give me factual differences. When I hear the “no-criticism policy” stuff, I suspect one of two things: either they don't stack up so well versus the competition, or they're too lazy to keep track of them. Or both.

It's so much more believable to say, “I'm glad you asked. Your house is in Colorado and you know how we get hailstorms here like nobody's business. We put a special liner under the shingles that gives them the ability to absorb some shock from above. It's true that it costs a little bit more, but we've found that it results in way fewer callbacks after hailstorms. We're the only company in Colorado that uses the roof liner as standard equipment.”

Now that's useful! Maybe I don't care about hailstorms because my insurance company will pay for damage. But at least I'm given a specific, factual difference. I also have a little comfort that they're keeping tabs on the competition, which makes me feel like I don't have to do some of that comparison homework.

Importantly, if you don't have a verifiable advantage that you can defend, you need to work on one quickly. “Me-too” products invite intense price competition, leading to many business failures.

But differentiation isn't always just about product. It can be about attitude, service, and desire to win—essentially outclassing the competition in the competition itself.

A good friend of mine started and ran a successful software and digital signage business for movie cinemas. He ultimately sold this business for a very attractive price.

He tells a story about how his young company began by winning big cinema contracts, beating much larger competitors. Instead of showing up with just PowerPoint slides describing their solution, they shipped the actual terminals and/or monitors used in the cinema to the presentation site.

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