Forget About Competition. Lead Instead.

Competition in business is a waste. All the time thinking about and trying to compete with other companies or products could be spent in creating your own uniqueness to the point that there is not any competition. Competition reminds me of conformity--everything being the same as much as possible. So, one business has a sale and the other business feels the need to have a similar sale and try to match prices as much as possible and maybe even go lower. I call that competing for the lowest gross profit. What sense does that make?

The Ford dealer complains the GM dealer down the street is undercutting the market and stealing business. The GM dealer says the same of the Ford dealer and so on. The worst of it is when the dealer is competing with their own brand against the dealer in the next town.

Try something new and different. Don't compete. Lead. Competition is just following each other tit for tat. Do something different for yourself and pay no attention whatever to what is going on down the street. Let them all compete over the lowest gross and you can do something totally different.

One of the first things I learned in the car business (I didn't believe it for a long time)is that only 4% buy price. Everyone else buys something else. 100% may talk price, but that is not what they mean and price will not sell them. Yet, you look at dealer to dealer and manufacturer to manufacturer and they think that price is the way. It's not. The price doesn't even have to be competitive. It does need to be fair. What fair means is that it is equal to the value that is offered for it. Fairness is in the mind of the consumer mostly, and it is up to the seller to provide the value.

Think about ways that you can lead in the marketplace. I talked about some of the ways that I achieved that in the last post by stocking unique items, adding value through options and accessories, not being afraid of color and so on. All those things set our operation apart. We had no competition. Matter of fact, we started and maintained a one-price selling strategy that worked very well.

If the customer won't pay the price, the value is not large enough. There are a lot of ways to add value that have nothing to do with price. Personal service, service department hours, how they feel they are being treated and so on. There is much that can be done to create value and avoid competing on price.

How can you be a leader in what you do? How can you do things that make it so that you don't need to think about competing. Develop those things.