Lessons in Prosperous Competition - Vegas Style
by Bobette Kyle

A recent trip to Las Vegas inspired thoughts about how direct competitors can thrive in the same physical or virtual space. I often hear people overly concerned that their actions will somehow help the competition. While it's strategically healthy to be aware of competitors' activities, an obsession with doing absolutely nothing to help a competitor can be detrimental to your own business.

Vegas, for example, is a place where directly competing businesses regularly open right next to each other. When one business attracts a new customer, it means more business for nearby competitors. The town grew and continues to flourish because competitors all work to bring new customers into the area. Each competitor benefits from the others' marketing activities. If business owners had taken the attitude that they would in no way help the competition, all would have failed.

Differentiation

Competitors can thrive together because no matter how much businesses are alike, there are also differences. These differences can be turned into competitive advantages and -- in the customers' eyes -- help differentiate one business from another.

Say Tom, for example, has a large variety of both machines and tables at his business, Sam's place has mostly low limit machines and Jackie provides a lot of high-end table games. Different kinds of people are going to gravitate to each business. If Sam, Tom and Jackie understand what types of customers are attracted to each of their businesses and why, they can all thrive together.

The Target Market

Let's call Tom's, Sam's and Jackie's favorite customers trout, guppies and whales, respectively. Every whale, trout and guppy are potential customers for any of the three competitors, but each will tend to prefer a different business.

The whales like high-end table games much better than machines. They, therefore, will tend to stay away from Tom's and Sam's. Guppies are looking to squeeze a lot of entertainment value out of a low budget, so will find less satisfaction at Jackie's or Tom's. The trout are more middle-of-the-road and have a bit of money to spend. Trout also like a variety of options, so will be happiest at Tom's.

Conversely, each business owner prefers to serve his favorite type of customer, for various reasons. Jackie, for example, will see guppies as a lot of trouble for a relatively small profit, while Sam must take on a higher risk than he's comfortable with to please the whales.

Competing in Harmony and With Prosperity for All

If the three business owners understand that -- although they are competitors -- they are not competing for the same customers, then they can all increase their business by cooperating in a relatively friendly competitive environment.

Whenever a whale wanders into one of the guppy or trout businesses and is not completely happy with the facility, for example, that owner can suggest the whale try Jackie's. Ditto when the guppies or trout find themselves mismatched to a business. This way, all three owners enjoy higher customer satisfaction and increase their customer base.

This concept of referring or sharing customers manifests itself in other ways, too. On the Internet, for example, a seller of marketing software may be an affiliate of a marketing bookseller. Whenever the software company's Website visitors prefer marketing books to software, that visitor is referred to the bookseller through a link.

How You Can Compete Prosperously

What does this all mean for your business? Find out through the following exercise.

First, make three lists:

1. List several competitors. 2. Describe your target customers, and then list features of your business, product or service that make them a perfect match. 3. Describe your least favorite customers, and then list features of your business, product or service that make them a mismatch. Beside each feature mismatch, write the feature that would be a good match.

Now, develop a fourth list. For each line on list 3, choose the competitor from list 1 that most closely offers that "good match" feature. This fourth list contains your keys to prosperous competition.

Next, brainstorm ways you could work with these competitors to increase the bottom line for both of your businesses and approach them with your plan.

When you are able to establish a cooperative competitive environment, overall customer satisfaction increases, the industry expands and you prosper.

About the Author

On that recent trip, Bobette got married in Las Vegas to Tim, her beau of nearly 22 years.

Bobette Kyle draws upon 18+ years of Marketing/Executive experience, online marketing experience, and a marketing MBA as inspiration for her writing. She is publisher of WebsiteMarketingPlan.com and MyOnlineWeddingHelp.com, as well as cofounder of Daysteps LLC.