BusinessTN

Unless you've found that elusive unoccupied niche, chances are you have competition in your industry. But though martial metaphors abound in books on the subject, business owners who seek only to vanquish their competitors may be doing themselves, and even their industries, a disservice.

First and foremost, competition can provide crucial insight into that most valuable resource of every small business: the customer.

Jeff Cornwall, writer of the Nashville-based blog, The Entrepreneurial Mind, suggests that business owners ask, "How are [competitors] satisfying the customer--are they giving customers what they want better than we are? If so, what can we do to win those customers over?" It's also important to evaluate the standards being used, asking, "What are the customers using to make this decision?" Cornwall adds.

In other words, the problem may not be a company's failure to offer customers what they want, but the perception customers have of a company's offerings.

"The most important thing to pay attention to is how customers differentiate between your business and the competition," says Michael Synk, owner of In-Synk Consulting in Memphis. "Too often, we focus on how we as business owners differentiate." A company can devote time and money to defining its identity, but if the customers don't share that vision, that's time and money wasted.

The usefulness of the customer-competitor relationship goes beyond just learning more about the customer. The best customers make the best scouts when checking on the competition.

"Businesses should regularly ask clients how good a job they're doing and what they're doing best," Synk says.

For Synk, this means figuring out one's strong suit relative to other businesses and optimizing that advantage as much as one can. Focusing on what one's company does right, and not what another business does well, can make the difference in competitive arenas.

"The biggest mistake I see is companies changing their priorities without thinking about it," says Bridget DiCello, founder and president of Activating Employee Performance (and one of Synk's area competitors). DiCello thinks that focusing too much on the competition and its business model can lead to a dangerous drop in the attention one pays to one's own.

"They see competitors doing something and change their approach to match," she says. "But you can't take your eye off the ball of who you want to be." DiCello also points out that most small businesses can't afford an ad war, so the key to understanding and emphasizing the differences between companies is through relationships with both one's customers and competitors.

Competitive does not necessarily mean combative. While Synk knows his competitors--DiCello and Jim Piatchek of The Professional Disturber--the three emphasize their different products rather than a difference in quality. All agree that establishing a unique way of doing things will mean one does not need to go head to head with competitors over every customer. "There is no real competition if I do business properly," Piatchek says.

This more enlightened approach to competitive coexistence can actually be good for the industry as a whole.

"I want the competition around me to be the best that it can be," DiCello explains, "because that brings credibility to my industry." DiCello thinks that, in the long run, competition means a stronger industry, and a stronger industry means more customers--ideally, enough to go around.

In the Information Age, it's easy to get basic statistics on potential customers and competitors just by using Google or accessing public information at the Chamber. But the real advantage comes through personal relationships--with customers, suppliers and the competitors themselves.