Here is an excerpt from an outstanding article written by Rhonda Abrams and featured by Inc. magazine online. I urge you to read the complete article by clicking here.
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If I asked you who your competition is, you’re likely to mention the company down the street or across town that sells the same product or service as you. And when I ask you how you’re different from your competition, you’ll tell me that you’re faster, cheaper, or better than your crosstown rival. But competition today comes in a lot more forms than just the guy down the block. If you want to compete effectively, you have to understand how you compare in more ways than just your prices.
A big part of the change in the competitive arena is the Internet. You may be the only company in town that sells purple doorknobs, and a year or two ago you could have cornered the local purple doorknob market. Today, however, customers flocking to buy those doorknobs hop on the Internet and start checking suppliers all over the country. Ask local bookstores about the impact of Amazon.com. They’ll warn you about the power of Internet competition.
Services aren’t immune from the power of Internet competition. Sure, if you’re a dentist, it’s impossible for a patient to have a tooth pulled on the Internet, but if you’re a graphic designer, it’s not that difficult for a client to have a brochure designed by a cross-country competitor. In an age of Internet competition, you have to distinguish yourself with better customer service, unusual offerings, the power of your personality or talent, etc.
The Internet doesn’t just give you a million new competitors, it creates a new type of competitor: information. After surfing the Web, customers may walk into your store knowing the wholesale cost of your doorknobs. Ask a car dealer. Car shoppers these days walk into showrooms armed with a stack of computer printouts detailing the wholesale cost of every option. How will you cope with a more informed customer who may be willing to put up with the inconvenience of mail order if you don’t cut your profit margins?
You’re lucky, even though it may not seem that way, if all you’re competing against is the Internet and your land-based competitor in town. An overlooked competitor — and the hardest one to beat — is inertia. In most cases, customers have the option not to buy at all. It’s not enough for you to know that customers need your product or service — the customers must truly believe they need you. If you’re a plumber, someone whose sewer is overflowing isn’t going to be doing a lot of comparison shopping. But most customers don’t have that type of pressing need.
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To read the complete article, please click here.
Rhonda Abrams writes a widely read column on entrepreneurship and small business. Abrams is also the author of the well-regarded business plan guide The Successful Business Plan: Secrets & Strategies. She has started and built three companies, including her publishing company, Running ‘R’ Media, and her newest enterprise, RhondaWorks, which plans to offer a comprehensive online interactive business planning center. Visit Abrams at http://www.rhondaonline.com/.