How can we reduce competition? B2B marketing would be far simpler if there was no need to deal with those pesky and persistent competitors. A recent John Oliver’s take on Net Neutrality, he brought up how Comcast and Time Warner compete with each other. Comcast does not offer its services where Time Warner is already established in that state and vice-versa.
While this ‘arrangement’ is good for these companies, it isn’t good for the public. Creating a monopoly comes with a high price for the public. The biggest cost is no choice, which means you will pay top dollar for that service. In addition, monopoly controls the messages you receive and gives power to other companies that you may or may not want to support.
Given limited budgets for most of us, we buy fewer things. Macroeconomic output drops; people become unemployed, and political unrest ensues.
As a small business, how does this information help you to reduce the competition’s position with your target market? For most of us, we deal with competition every day. In order to do so successfully, we need marketing tactics based on our competitive strategy. But that leads to the challenge of understanding competitive strategy. Here are a few basic steps to understanding how to develop a competitive strategy.
Competing as The Small Company
Target a certain location. Just like Comcast and Time Warner, target a certain state/province or city and own it. Get the local media to notice you, build a community and know your target market intimately.
Go where the competition is not. It may take more work to enter a new market but if the competition is not serving it, it may present a solid opportunity. Take the time to review it carefully because this may prove to be a great opportunity for your business. Remember, if you are unsure about how to move forward, call us!
Implement pricing strategy: There are certain pricing strategies you can implement to get ‘in the market fast’. Of course, like everything else, you need to do your analysis first before implementing this type of strategy.
Collaborate for collective impact. A growing trend is to putting aside self-interests and collaborate with competitors and other leaders in your industry to build new products and advance shared objectives. A perfect example of this collaboration is with the top 12 Public Relations Firms in Canada. Once they got together and created a council to promote the business of public relations. At the same time, it helps to advance their shared objectives, to keep and win clients.
Maximize Switching Costs. Become an invaluable provider to your client as a way to increase switching costs. Start by knowing everything there is to know about your clients. You probably heard firsthand about your clients’ difficulty with the competition. By taking the time to become invaluable you will become unassailable.
Reduce competition – What Not To Do
Create a pricing agreement with the competition. While Comcast and Time Warner’s market entry planning looks more like a pre-agreement than strategy, I suspect they didn’t call each other to agree on pricing. Price fixing is against the law.
Promote your company as the hero or only guy in town. Just like Comcast and Time Warner, they never promote, “Hey, we’re the only cable company in Boston!”. Instead, they advertise, “Switch to us!”
Reduce Marketing Efforts. One way to let your competition get ahead of you is to reduce your marketing efforts. Invest in marketing, build your brand and keep your competition out.