Competition — What Really Matters?
Tom Stimson
February 10, 2023
Two businessmen wearing boxing gloves stand face to face, representing competitive business.

We all have competition. And, as many of us are aware, competition can be a healthy thing. We look at each other, evaluate what we can do better to give us an edge, and make improvements.

HOWEVER, there’s a tendency in our industry toward an unhealthy focus on competition. By unhealthy, I mean it’s not productive. It’s expending energy that’s not going to put you in a better place.

There’s another side to problems with competition, and that’s having an unclear idea of who your competition is.

For example, I recently read a marketing plan and noticed that seven out of the 10 businesses listed as “direct competitors” were in no way, shape, or form this company’s competition. They were simply other businesses in the same industry.

It’s important not to misunderstand who your competition is.

Your competition is someone who pursues the same customer as you, offering the same products and services.

Competition: Where NOT to Focus

When it comes to your actual competitors, where should you focus, and where shouldn’t you?

Let’s start with the latter. A huge area of unhealthy focus on competition is fearing that they’re going to steal your customers, your employees, your ideas, and your pricing. That’s a stepping-stone to paranoia.

Why is this focus so unhealthy? For one, the perceived threat your competition poses would be reduced if you simply improved what you’re doing in your business. Your competition is not going to steal a loyal, happy customer or a loyal, happy employee. They won’t be able to.

Most of our competitive fears are unhealthy. We ask, “How is that company making money at those prices?!” Who cares? It’s not our problem.

Oftentimes, a business’s unhealthy focus on competitive fears stems from a self-consciousness about aspects of the business they aren’t great at. In those cases, though, focusing on the competition is an unhelpful distraction.

Your business won’t get better by focusing on the competition. The focus should be on you.

Infographic: ISL - 2/13/23

Competition: Where to Focus

Now, I’m not arguing that you should ignore your competition. Market intelligence is a good thing, and there are certainly productive things you can learn by observing others. A competitor may see something in the market that you don’t, but that you need to pay attention to.

Instead of worrying about how the competition is going to steal your good ideas, how about turning the tables and stealing theirs?

Pay attention to your direct competitors’ branding, their websites, the products and services they’re selling and delivering. What type of testimonials are they using? What’s showing up in their newsletters?

Look at the relationships they have with key customers and suppliers. If those relationships change, it could signal a trend.

It’s good to know what your competitors think is important because you might find something you’ve missed on your own.

This kind of information isn’t micro-information, it’s macro-information. If three of your competitors have all updated their website, branding, messaging, and value proposition in the past year, you better pay close attention. They may be on to something.

Competition reminds you to pay attention to your business, not theirs. In this sense, you can almost look at your competitors as unknowing allies.

What to Do if You’re Still Worried

Despite all this, you might still have a tough time letting go of fears about your competition. If that’s you, here’s what I want you to take away: inward focus. Focus inward instead of outward.

What do I mean?

If you’re worried about losing customers, get really good at onboarding new customers. Be insanely easy to do business with. If you’re worried about losing workers, be ready to take on new employees and freelancers and make that process as seamless as possible.

Then, while your competitors are working hard to steal your customers, entice away your employees, and sneak in under your pricing, you’re working really hard at being customer-focused, employee-focused, and supplier-focused.

Know that putting energy into these areas makes it more difficult for your competition to accomplish any of the things you’re worried about. That should help you sleep at night.

Quote: ISL - 2/13/23


My old boss used to say, “I don’t care what my competitors know about my business, how I run it, or who my customers are. I just defy them to do better than me.”

That’s great advice.

Bottom line: Awareness of competition is important, but inward focus is much more productive than fear-based outward focus.

About Tom Stimson
Tom Stimson MBA, CTS is an authority on business and strategy for small- to medium-sized companies. He is an expert on project-based selling and a thought leader for innovative business processes.
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