| by Bryan Ziegler,
Indian Hills Iowa SBDC, Ottumwa, IA At times, business seems to have an obsession with beating the competition. Businesses need to be more tolerant of competition and yet on the other hand ignore it. If your obsession is always what the competition is doing, you are acknowledging their leadership in the marketplace. This implies that your business should take a leadership position; and if anyone should be asking what the competition is doing, it should be your competition. A leadership role in the marketplace means your focus then becomes customer-driven, not responding to your competitor. The only reason your competition exists is because some of your potential customers are choosing them over you. The focus should be doing all you can to get the potential customer to buy from you and to keep your existing customers. Even after doing a good job for a customer, they're not always easy to keep. I completed a job for a customer and knew they were satisfied, but then several years later I found out they had made another purchase from the competition. Their reason for doing this was just that they wanted to try it out. It is always easier to maintain a customer than to get a new one. However, my experience supports the idea that a sale is never complete until you've made the next sale. Consumers still maintain their right to act irrationally as defined by you. The only way to counterbalance their irrationality is to become involved in their decision-making process so you understand the customer's thinking and hopefully can influence it. barcelohotel KilkennyOn the other hand, businesses should be more tolerant of competition. This doesn't mean you shouldn't get to know your competition. In fact, find out all you can that is legal to find out about the competitor. Competition can increase the size of the pie for total sales volume in a trade area. This has been documented in research studies. The reason given for this behavior is that if there are two or more businesses in a trade area, the size of the pie is larger because consumers will come there to do comparisons. The mindset of the consumer is that it is a built-in safety device that the price will be competitive if there are two businesses competing in one market area. If there are 20 or 30 businesses of a similar type in an area, this becomes a tour or vacation destination; for example, the Amana Colonies. Another consideration that could increase the size of the pie is to consider some cooperative effort with the competition. Cooperation should be carefully pursued from the standpoint of you don't want to be accused of price-fixing. An example of cooperation could be where two stores in one town agree to have a sale on the same weekend with the idea of advertising it in a larger geographic area, thus bringing more people to the sale. > See also: Marketing, Advertising & Sales | 
