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Don’t Be Afraid Of The Competition, No Matter Who The Heavy Hitters Are

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“The healthiest competition occurs when average people win by putting above average effort.” – Colin Powell

Unlike most of my colleagues who also host other people’s websites on their servers for a living, competition is something that I have always seen as a good thing.

Why? – Well, because where there is a competition, there is profit as well.

I can’t say that I get that “warm and fuzzy” feeling inside from competing with all sorts of big and small brands within my niche, and that I’m always “excited” when someone tries to push me out of the game and take my customers away, but competition (in a formal sense of the word) really makes me work harder and think smarter.

It doesn’t matter what you do or what you’re selling, when you really sit down and think about it, intense competition will basically tell you everything you need to know about a certain market.

It will tell you what marketing tactics work and what don’t on a specific audience. It also tells you what to do and what not to if you want to retain and grow your active client base.

It’s all right there in front of you. All you have to do is look.

As a serious businessman who’s chasing a great ROI, I couldn’t ask for more.

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Thanks to the Internet, everything is transparent these days. All the numbers and patterns are easily accessible to anyone who’s willing to look a bit harder for them.

The Early Bird Catches The Worm, But The Second Mouse Gets The Cheese

When the competition is high, it generally indicates that a certain niche is very lucrative and that all the heavy lifting in marketing research has already been done.

All you have to do is meet the top players, analyze their actions, copy their good traits, and add something new and valuable to their mix, and voila – there you have it. A competitive business in a highly-competitive market.

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Although most people tend to get scared when they see a lot of brand names competing for the same customers in a single market, practice has shown that it can be quite easy for young and creative companies to stand out from the pack, even though they’re basically going head-to-head with business entities that are basically sharks in a small fish tank.

How Come?

Well, because most already established business owners tend to take the easy way out. “Monopoly markets” are more likely to suffer cost and quality inefficiencies, to be less innovative, to experience negative issues of personal motivation, to gain less understanding of the core audience and – among other issues – encounter weakened sales by effectively not selling what the audience demands, produce products of less quality than they would in a competitive market.

This gives you, a newbie, more than a fair chance to stand above the competition by providing new value to the people you are selling to. If you, as a new name in the game, provide some fresh and unique benefits with your services, you can seriously alter on how big brands from your niche do business.

Why Should The Big Bad Shark Be Afraid Of A Teeny Tiny Fish?

Let’s, for example, think about web hosting as an industry in which one vendor, John Doe, was able to monopolize the entire market with his own services. Everyone’s is hosting their website on his servers. He has the whole market eating from his hand.

Although quite powerful now, the first real signs of competition will force our John to tweak his business model.

If he has the desire to stay relevant, his service will have to go through the following stages:

Innovation: It doesn’t matter how many clients you have or how good your service is, if you don’t constantly evolve – your competitors will eat you alive. People love to try new things, that’s a fact. If someone appeared on your market with a bit different product who offers some extra features that you don’t, it’s quite reasonable to assume that people will go to check it out.

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That’s why you constantly need to have one ear to the ground and keep adding more and more value to your products and services.

Although it might not seem like it at first, but John’s “opponents”, no matter how big they are, would force him to learn more about web hosting and customer satisfaction, and elevate his services to the levels he would never have even dreamed of reaching.

Furthermore, having been educated by the competition, John’s services would likely be better. Better services usually lead to higher profits, so it’s quite normal to assume that competition would actually improve our subjects business, instead of destroying it.

Figure out his core audience, and how to please it: A characteristic disadvantage of the monopoly is complacency in regards to understanding the core audience. 

Being the only big fish in his pond, John doesn’t really care on how to design and deliver the ideal service to his target audience. Why? –  Well, because he doesn’t need to. Where they’re gonna go when there no other powerful hosting company out there?

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But, if competitors start to pop up out of the blue, John would find himself in a pretty tricky situation. He would have missed the boat to tailor a perfect service for his consumers. His sales would be negatively impacted if, for example, he failed to understand that his audience requires cheaper and better designed VPS packages.

Pricing problems:  In a monopolised market, such as the hypothetical web hosting scene in which our John operates,  determining the right price for hosting packages would be an ongoing battle to figure out the price elasticity of demand for each package, which of course fluctuate with too many variables to mention. In this monopoly market, John would constantly suffer sales inefficiencies.

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With so many marketing techniques and channels available, there is no reason to avoid competition no matter who the heavy hitters are. If you really apply yourself, you could quickly stand out and start building an audience.

Thank you for reading my latest blog posts. I hope it was helpful. If you have anything to ask or add on this subject, feel free to write your thoughts and questions in the comments section below, and I’ll do everything in my power to reply to them ASAP.

That’s it for now,
See you soon again,
Goran @ AltusHost B.V.

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