Your Competitors Are Your Cannon Fodder

I’ve seen potential clients over the years who always claim they’ve got the next million dollar idea (red flag #1), and that I’ll have to sign some sort of agreement (red flag #2) not telling anyone about it. So within the first 45 seconds of our meeting, there’s 2 red flags already in the room waiting for red flag #3 to come along and inform me politely that our meeting is done. But I will wait and see what this “next great thing” will be. Sadly, red flag #3 is that they have no idea that someone else has already done this.

Usually, with my existing clients, we’re all about regular brainstorming and trying to figure out what would be a real added value for visitors or clients that won’t require a whole lot of heavy lifting to put in place and is already being practiced in other industries. Video, podcasts..fire breathing monkeys.. whatever right? But what happens when a competitor beats you to the gate and delivers the same exact service before you go public with it?

Simple. Let them be your cannon fodder.

Spotting Indicators

One of the biggest factors to consider is going to be pricing for whatever this service is. So logically, this is going to be the first metric you can measure just based off of public reaction to your competitors service offering.

If it appears slow and unresponsive, odds are they’re overpricing or, more commonly, not publicizing it very well. Should be easy to figure out which is the problem. Looking for marketing materials is gonna be easy for you because you probably advertise to the same places. If the marketing is in play and the price seems high to you, then you got it figured out for sure then. Figure it out and you’ll have a basic understanding of it’s probability of failure versus success.

If it does take off real well, then sit back for 4-5 weeks and see if the price will go up from the original offering. Either 2 things are happening here if it does; (1) they want to really milk it while it’s hot, or (2) the return is not covering expense or expectation quickly enough. If you can figure out which, there’s another proof positive metric for you to have on your side.

(*hint:Â If they’re driving a BMW one week, and then riding their 9 year old kids bike to work the next week… then you know it’s a flop)Â

How To Use Their Loss or Gain To Your Advantage

So the other guy has somewhat invented the wheel for you, so obviously we don’t need to reinvent it (duh). Looking at the 2 mentioned scenarios, let’s first see what we have to work with if they were successful.

We know that this is something the public responds well too so there is a strong probability that your introduction will be greeted with people curious about your spin on it. To really get things heated up though, you need to kick off a pricing war by going a little cheaper than them, but not too much where it will hurt you. If they’re price gouging and you know it, go with the lowest price you can and watch them get their asses handed to them on a silver platter. I’ve seen it happen more than once, and let me tell you… feeding your ego this way should be against the law.

Now let’s look at the other earlier scenario and see where we can benefit from their failure and because being evil is fun sometimes. Many new business features fail because companies rely on their existing customer base to be the primary audience to market to. Truth is, that existing client base probably won’t show too much interest or convert into too much of anything, simply because they have what they wanted from you to begin with. So, marketing to your repeat clients is good but focusing outside of them is even better.

You know that whatever pricing your competitor used was a negative draw to the new service, so you’ll want to get your lower and slightly profitable price out there as quickly as possible. Think of the impression this “affordable” price will have. You know that people could benefit from this service, but it has to be priced right. So price it right.

Conclusion

Your competition will always try to be the first out with the next big thing, that’s just the nature of the beast. But to gain a foothold from where they stumble is a safe business strategy. I’m definitely not encouraging people to never take a chance, but I am encouraging people to check out their competitors and track their movements. Who knows, they may have your “next big thing” without either of you even knowing it.

This entry was posted on Friday, September 7th, 2007 at 8:31 pm and is filed under Marketing, SEO. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.