Last week, Seth Godin taught me something about the competition. Part of me already knew what I had learned, but the words that he used to describe the concept brought me greater clarity. He said, "Two teachers are not competing. They just take the same advice. "
No real competition
You do not compete with your irrational competitor, who wins only in prize money. You have just been on the same board. Potential customers who think that the only real value is the lowest price are not your potential customers and certainly are not your dream customers. These prospects reside in the lower left corner of the table, where the lowest price relationships and transactions reside.
Your irrational competitor does not compete with you either. They can not create enough value to deserve a higher price. Their value proposition is not designed to attract or retain customers who are looking for great trust, caring and value. You create a convincing differentiated value that is worth paying, and it puts you somewhere in the upper right quadrant. You are a higher price and better results.
Your place on the board
Here is the thing about your place on the board.
Your real competitors share your quadrant. They also apply a strategy of intimacy with the customer (see The Discipline of Market Leaders), competing to deliver the best overall value by creating strategic outcomes, a value that is worth them to pay more to obtain. Your real competition is probably very good in what it does and a very tough competition.
You are irrational when you decide to compete with your true competitors by adopting the quarter circle approach that is consistent with yours, the lower left quadrant.
Your irrational competitor is not irrational when he is competing in his quadrant. In fact, they are quite rational to pursue and compete with those who do not recognize the need for better results or who believe that the lowest price is the only real value. They are only irrational when they are trying to compete in the upper right quadrant.
"But wait," you say. "Sometimes our irrational competitor beats us for a potential customer who really wants to create more value." Some things may be true here: 1) you are wrong, and the perspective belongs elsewhere to the board, 2) The prospect is wrong and will learn soon the mistake of its way, or 3) You have not managed to help your prospect to understand where she is on the board and the quadrant difference.
Get Seth's new book (and one of my two main books out of 19), This is Marketing: You can not be seen until you've learned to see.
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