I’m no master of how to run a business, quite the opposite really, but something I have come to understand is the importance of understanding your competition. Not identifying each one by name and analysing their strengths or weaknesses; identifying what segment of your market is actually your competition.
I happen to work in perhaps one of the most commoditised industries there is. In a broad term lets call it ‘website design’. So are my competition everyone within this industry? Let’s consider…
Companies that give away websites for free
Is this my competition? No way. These are companies that run razor thin profit margins through shady tactics and inserting advertising on your websites. They offer large swathes of features that most of their users may never use, on template websites that all look the same.
Large agencies that charge much, much more than I do
Is this my competition, then? Nope. Large design agencies have overhead costs that I don’t, and charge accordingly. Having a number of staff also then allows these companies to take on projects of a higher degree of complexity than I would ever attempt myself.
IT and other non-design companies that offer ‘web design’ in their bullet point list of service offerings
Wrong again! More than once now I have been asked by a potential new client if my work includes X, Y and Z because they’ve been supplied a laundry list of standard inclusions from somewhere else. Most of which they’ll never use. I’m quick to assure people I can do all of those things, if appropriate, but do not offer a standard website package like it comes out of a box.
Anyone that custom designs and develops small business websites, with inclusions appropriate to the content and success of the project
Now we’re talking. This is what I do. If anyone else does this then they’re my competition in the marketplace, and I welcome it. It seems easy for many to get upset or defensive about any provider that offers a service tangentially related to their service offering. Why? If I don’t compete with any of these other businesses listed above, I’m not concerned about their movements.
This is especially true with designers, for example when Squarespace offered a free logo design tool. As if it would impact each individual designer’s income and place in the market place. If your business will shut down because someone released some free software that is better than you are, what hope did you have?
I’m more concerned with my own work, the quality of it and what it says about my business. If someone wants to offer a far inferior version of what I do for free (or nearly-free) then it does not impact me. If someone wants to offer a far more complex service offering at a far more expensive rate then that’s okay because I’m not competing in that same market.
It’s easier to compete against your competition when you narrow them down to those that actually compete against you. You can’t take on the whole market by yourself, and I won’t try.
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