Tough economic times can have us scrambling around trying this or that. Sometimes, companies will look to their marketplace for direction. But in business, focusing on the competition is way over used and very stupid.
Here’s how it oftentimes plays out. One toy store lowers its prices and so the other toy stores respond in like manner. Or one customer service center outsources its calls to cut costs so others do the same. Of course, this behavior is not limited to toy stores and customer service centers– we see it in almost every market from online retailers to gas stations.
But this is plain stupid. Why? Because we stop focusing on our customers and we focus on our competition.
And when we stop focusing on our customers and start focusing on the competition, we tend to gravitate toward price. Why is that? Seth Godin said it best when he said, “cheaper is the last refuge of the person who’s not a very good marketer.” Cheaper means you are out of ideas. You have nothing else to offer the customer so you turn your focus off of them and instead focus on the lowest common market denominator of price.
But what I have learned is that customers most often only concern themselves with a cheaper price if you have completely drained the pool of value. Add more value before you mess around with price (especially in these economic times).
Being aware of your competition is one thing but focusing on them is death by customer neglect.
Happy Wednesday all!