In every facet of life we deal with a form of competition. From the time we are born we compete for attention, athletic supremacy, promotions, raises, bigger houses, nicer cars, for bigger and better stuff. Competition is everywhere and is part of our daily lives, what varies from person to person is how we decide to handle competition.
In retail we compete for different forms of trophies, than competitors or the football field would. We compete for market share, sales, and profits. How do we handle the competition? Do you know what the competitor down the street is doing? Is that enough?
In previous economies the tactics of know what the competition is running on sale, and knowing there price is no longer enough. Who hasn't heard the saying
“Keep your friends close and your enemies closer” -Michael Corleone Godfather II
Though enemies is bit over dramatized for retail, it is how we must proceed in a market where the competition is not only the guy down the street, but also the big box store, and the internet. It is more important now to break bread with your competitor than it has ever been.
1. In-Stock Position In the pool and spa industry, there are several thousands of whole goods as well as parts. To stock every item a consumer could potentially need is improbable. Now if you have ABC parts, and you know your competitor carries XYZ parts, you will be able to more effectively service your customer.
Now your thinking “Wait, you want me to send my customer to a competitor?” Yes I do. Today's consumer is impatient. If you do not have the item they need most likely they are going to go to a competitor anyway, or worse they will go to the internet.
A consumer will remember you for being a person who was more concerned with helping them, than making a sale. Brick and mortar make a store, you make it the place to shop.
2. Market Trends! If you have an open dialogue with your competitor, you will be able to identify fluctuations in your market. This applies to many things. Store traffic, new items, the must have inventory, water problems etc.
If you are communicating you and your competitor will be able to identify trends happening in your market and react to them quicker. If customer traffic is down, redo your scheduling, and increase your marketing. If a new item is selling fast and you don't have the item or low stock, order more. If there is a mustard algae issue, stock more treatment chemicals. Being able to react quickly will make you more profitable, and keep your customers happier.
3.Information!!! You will never know everything. Talking to your competitor for a help with a chemical issue, information on a new technology, or ideas to improve your store is NOT A SIGN OF WEEKNESS.
We all need help sometimes. Being able to freely exchange the knowledge you have with your competitor will help you grow as a business, and as a person. Your customers will be happier and more loyal when you can better answer there questions/concerns
4. Pricing! Lets get it out there right now, as a small business you cannot compete with big box stores on price! You can however compete with other small business' on price, but where does that get you?
If your competition is a dollar less than you, what do you do? You drop your price by another dollar! Back and forth you lower prices until there is no reason to carry the product at all because you are not making any profit.
Customers come to us because we are the professionals. We possess the technical knowledge and expertise to solve there problems. They will come to you for your knowledge not your price. If you know your competitors price, and don't start a price war. Charge a fair price for your goods and services, and don't get caught in the price game. If no one plays everyone will win.
I have four competitors within five miles of my store (not including big boxes). I talk to them, weekly, if not daily. We share customers, we trade information, and we are all doing well in our market. Know your competition, break bread with them, they are your best friends!
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Comments
I once had a customer come into my store unhappy with a dark plaster pool a competitive pool construction company had just completed for her. I offered to take a look at it, and, in all honesty, it was not a bad plaster job. It looked like dark plaster jobs look, a bit mottled and not a "solid " color. The competitor had perhaps not done a good job of communicating what she might expect, since pictures of those pools look differently than the pool itself, and I first explained this to her. Then I suggested "evening it out" with application of extra stain and scale product, which solved the problem, made her happy, and saved my competitor and his plasterer having to replaster the pool to make her happy.
This pool builder does not have a retail store himself, and while we still compete with him for pool construction, can you guess whose store he sends EVERY one of his new pool customers to now? Telling the truth instead of taking an opportunity to gig your competitor pays off in unexpected ways. Plus, it's simply the right thing to do.
Every person, retail store and business is going to have strengths and weaknesses. By making your strengths your selling features, and being honest about your weaknesses, you are creating trust in your client base.
Not only are you keeping your market healthy and happy all around, but you are encouraging a higher level of service for the entire industry. Fantastic!
I'm not best friends with my competition, but only because I have no competition! Now, that is both a blessing and a curse. If I had competition, it would mean that I could show how I do a better job or provide a better experience or some value added knowledge and help that another may not. I do feel that there is value in having competition, as it keeps you on your toes and makes you strive to do it just a little bit better (and because there is always a job or two that you really don't want and you could make your competition take it!).
We will have competition one day, and I am actually looking forward to it. And, when that day comes, I will look forward to being friends and respectful competitors!