I have come across many business owners whose entire life is based on what their competitors are doing. Every decision they make is the direct result of something their competition has done or is planning to do. We need to “be alert, but not alarmed” when it comes to our competitors and we certainly need to avoid the temptation to become obsessed with your competitors.
By all means have a healthy awareness of your competitors — I think this is essential to be truly successful in business, but don’t build your business around what they are doing. Rather, focus on what you can do to lead the way.
Often this obsession is the result of insecurity and fear. This is how price wars start, and the reality is that no one really wins a price war except the customer. Advertising becomes ad hoc and knee jerk instead of systematic and well planned and customer service is forgotten about as the business owner is too busy looking at what the competition is doing rather than what is happening within their own business.
Be aware of what your competitors are doing and evaluate their actions, but don’t make their businesses the centre of your universe. Use your competitors as a way to benchmark your own business and clarify what your competitive advantage is, but don’t lay awake at night obsessing over what your competitors might be doing.
In fact I really believe the best thing any of us can do is call the competition and catch up for a coffee. You might be surprised by just how much you have in common. Whilst setting prices is naughty and illegal, it doesn’t mean there aren’t other ways you can actually work together and have a positive relationship. But this does take a degree of maturity and not all business owners share this.
Be alert but not alarmed!