When you start out in business, it's tempting to pursue tactics that work well for your competitors. But while it's important to know the business competition, focusing too much on what others are doing can hold you back.
Developing your own specific strategy is a better approach than forcing yourself to keep up with the Joneses. Find ways to stand out, define yourself as unique, and gain loyal followers who appreciate what you and only you have to offer.
Have your own reasons for being in business
It's useful to look at business competitors to figure out the standards for the market in which you operate, and see how others are setting and responding to trends. But following your own North Star is the best way to ensure your own success.
“As a business owner, you only have so much bandwidth, so you shouldn't focus on what other people are doing," says Tanner Chidester, CEO of Elite CEOs. “You should instead think of the strategies that move your numbers higher and boost revenue."
Monica Eaton-Cardone, co-founder and COO of Chargebacks911, similarly says that knowing your “why" for pursuing your business dreams can help you run your affairs accordingly.
“Paying attention to what your competitors are doing can drive you to keep advancing and innovating," she says. “However, you don't want to fixate on your competition, or else you could lose focus. Remember: You have your own purpose for being in business beyond just beating your competitors."
Identify your competitors
It's a common mistake to assume you know who your competitors are. While some of them may be obvious, others may affect your business from unusual angles.
Eaton-Cardone advises distinguishing between primary and secondary competitors. Primary competitors are those that offer products or services very similar to your own. Secondary competitors offer products or services that aren't quite the same as yours but could make a buyer less likely to do business with you.
For example, if you sell a data management solution, your primary competitors are other makers of similar products. A secondary competitor may be a staffing firm that supplies data management professionals who can help companies better use their existing software, precluding them from looking for a solution like yours.
It's a good idea to ask your customers what products or services they consider viable alternatives to your offering.
“Market research is the magic word here," says David McHugh, CEO and founder of fitness blog My Mixify. “Who would fill the demands of the clients if you weren't around?"
Identify your unique selling points
To attract customers to your company above others, avoid competing on price. Offering the same thing as other companies with no differentiation—whether in the product, customer service, marketing and social media, or other factors—means that customers will only care about your pricing. Instead, give them some other reason to prefer you to your business competitors.
“Customers return to your business because they personally connected with a specific aspect of your company," says Varun Sharma, co-founder of Laumiere Gourmet Fruits. “A faceless, 'grey' business has nothing for them to hold onto."
Avoiding this fate requires strategic thinking and concrete planning. What will you do specifically to define yourself as different and more appealing?
“You have to remember that you're not simply trying to emulate your competition," Eaton-Cardon says. “You want to stand out, and the best way to do that is developing a strategy that sets you apart from others in your industry."
Chase trends and opportunities, not competitors
A good approach to creating your own path is to build your brand through constant innovation, striving to stay three steps ahead of where the industry is at the moment. Doing so allows you to move quickly as things change and take advantage of unexpected opportunities.
“I think that's ultimately the most important takeaway: Keep up with your competitors, but always keep the drive to innovate and grow at the forefront," Eaton-Cardone says. “Your motivation shouldn't be to just stay ahead of the next brand, but to elevate your own business as high as possible."
Find out more about Managing Your Business