Competition in business is a fascinating thing.
Sometimes it's incredibly obvious.
Take a trip to The Hub in Kennewick and you'll find one of my favorite local examples. Put a collection of food trucks together in one place and there is absolutely no mystery about what's happening.
They're competing.
Potential customers stand in little groups studying menus. Couples wander from truck to truck. Someone smells something cooking and suddenly changes direction. One person wants tacos. Somebody else has apparently decided today's nutritional requirements consist entirely of something deep-fried and covered in cheese.
It's capitalism in one of its most wonderfully human forms.
Of course, something else is happening at the same time.
Putting all those businesses together creates a destination. More people come because there are more choices. More people means more potential customers for everyone. It's a wonderful demonstration of the old idea that a rising tide can lift all boats.
But make no mistake: once everyone arrives, each truck still has to convince hungry people to walk up to their window.
That's competition we understand because we can see it.
The competition you can't see is where things get considerably more interesting.
“Your competition isn't necessarily another business that sells what you sell.”
The Competition Everybody Knows
Let's imagine four people—Dave, Lisa, Mark and Anne—all own chiropractic practices in the same local market.
They're obviously competitors.
After enough years in business, they probably know quite a bit about one another. They know who's expensive. Who's inexpensive. Who advertises heavily. Who has the beautiful office. Who specializes in what. They probably know each other's reputations and offerings nearly as well as their own.
They're all fighting for a share of the same chiropractic pie.
And many business owners I've worked with tend to think about competition primarily this way.
Who else does what I do?
That's an important question.
It's just not the whole question.
Because Dave, Lisa, Mark and Anne may be competing against businesses they have never considered competitors at all.
And the tougher things become financially for their customers, the more obvious that becomes.
My Rule: The Tougher the Economy, the More Competition You Have
Wait.
If there are still only four chiropractors, how did the number of competitors increase?
Because customers don't budget in industry categories.
They budget in dollars.
Let's imagine a family trying to make some decisions about Dad this year.
Dad needs new glasses and an eye exam.
Dad probably ought to have his hearing checked because his daily allotment of “WHAT?” is beginning to annoy his wife and children.
His knee has been bothering him, and it's probably time to have an orthopedic specialist look at it.
And regular chiropractic visits help keep his back from hurting.
In a household with plenty of disposable income, those things don't necessarily compete with one another.
Schedule the appointments. Get the glasses. Check the ears. Look at the knee. Keep going to the chiropractor.
Done.
But what happens when that family's available money gets tighter?
Now there are decisions to make.
And suddenly Dave, Lisa, Mark and Anne aren't merely competing against one another.
They're competing against the optometrist.
They're competing against the orthopedic clinic.
They're competing against the hearing clinic.
Nobody involved would normally describe those businesses as competitors. They provide completely different services.
But at the kitchen table where the family budget gets decided?
They absolutely can be.
The family has a finite amount of money available and several legitimate places it could go.
That changes the competitive landscape completely.
“Customers don't budget in industry categories. They budget in dollars.”
The Further You Get From Essential, the More Interesting This Gets
This phenomenon certainly isn't limited to healthcare.
In fact, the farther your business gets from something people consider absolutely essential, the more obvious it becomes.
Restaurants aren't merely competing with other restaurants.
A family deciding whether to spend $120 going out to dinner may also be deciding whether they'd rather spend that $120 on something for the house, a weekend activity, new clothes, concert tickets—or simply leave the money in the bank.
A photographer isn't competing only with other photographers.
A gym isn't competing only with other gyms.
A landscaper isn't competing only with other landscapers.
A furniture store isn't competing only with other furniture stores.
Your customer's bank account doesn't particularly care what industry you're in.
Every business is making some version of the same request:
Give some of your available resources to us.
The tighter those resources become, the more businesses are effectively competing for them.
That's why one of my rules of marketing is:
“The tougher the economy, the more competition you have.”
Not necessarily because more companies opened.
Because more purchasing decisions became either/or decisions.
This Changes the Marketing Question
This is where the distinction becomes important.
If you believe your only competitors are businesses that provide exactly what you provide, it's very easy to build your marketing entirely around them.
They charge $100? We'll charge $90.
They offer this? We'll offer that.
They advertise here? We'll advertise there.
They say they're the fastest? We'll say we're the most experienced.
That's conventional competitive positioning, and there's absolutely a place for it.
But it doesn't address the family sitting at the kitchen table asking:
“Do we spend this money at all?”
That's an entirely different marketing problem.
Now you aren't simply explaining why someone should choose you instead of your obvious competitor.
You're explaining why your entire category deserves a place in their budget.
For some businesses, that's easy.
For others, it requires considerably more thought.
What problem are you solving?
What happens if the customer waits?
What tangible difference does your product or service make in someone's life?
Is it a necessity? An investment? A convenience? An experience? A luxury?
And perhaps most importantly:
Does your marketing actually communicate that value?
Because screaming “WE'RE BETTER THAN DAVE!” doesn't accomplish much if the customer has already decided not to spend money on what either of you sells.
Stop Fighting Over a Shrinking Pie
When economic pressure reduces the amount customers are willing or able to spend in a particular category, every direct competitor can become fixated on fighting for a larger piece of a smaller pie.
Sometimes that's necessary.
But there's another question worth asking:
How do we keep people interested in the pie?
Businesses can spend enormous amounts of energy watching their traditional competitors while missing the larger change happening around them.
The customer hasn't necessarily chosen somebody else.
Sometimes the customer has chosen something else.
Or they've chosen nothing at all.
Understanding that distinction changes how you advertise.
It changes your messaging.
It changes your offers.
It changes how you explain value.
And it should probably change how you think about competition.
“Sometimes your customer didn't choose your competitor. They chose something else.”
Knowing what the business down the street is doing still matters. Knowing their pricing, positioning, strengths and weaknesses is basic competitive intelligence.
But don't become so focused on beating the three businesses that look exactly like yours that you forget you're competing for something much larger:
A place in your customer's priorities.
Because when money gets tight, customers don't just decide where they're going to spend it.
They decide whether you're worth spending it on at all.
And that may be the most important competition your business ever faces.