Ignore Your Competition, Fast

This is not based on a true story – it’s actually true: A managed service provider coyly tells the story of how he’s discovered the power of marketing. Since actively promoting his stable of services, he’s seen a steady increase in sales and, subsequently, revenue and profitability.

When asked for specifics on what kind of marketing he’s doing, he replies, “I don’t want to say. I don’t want to give my competition any ideas.”

Here’s the funny part, he really didn’t know who his competition was. He’s a regional managed service provider with an operating radius that reaches four states and four major metropolitan areas. When pressed for who his competition is, he says, “I think there’s, like, five.”

Now, you can only imagine the look on his face when he was told that there were actually more than 5,000 potential competitors operating in his patch. The color just drained from his face.

Some people might take the moral of this story as you need to think hard about who your competition is and how much competition you’re up against. In reality, the moral is you needn’t worry about competition if you’re doing a good job and stay focused on execution.

Competitive analysis is one of those things business gurus and consultants dwell on. Is it a good idea to know about your competition and know what they’re up to? Absolutely. Is it a good idea to obsess about competition? Absolutely not.

Focusing too much on competition – real or perceived – can lead to operational paralysis. Some managed services and solution provider companies succumb to competitive analysis because they incorrectly believe they must counter every move, offer similar products and match prices of their so-called competitor.

As our friend above discovered, he was swimming in a sea of competition, many of which already knew his marketing secrets because they really weren’t secrets. His success came not from beating the competition, but rather focusing on what made his managed service business better: attention to detail, quality in service delivery and business-oriented solutions that added up to real value in the eyes of his customers.

The other reason for that MSP’s success was mathematics. Even with so many competitors in his service radius, they were dwarfed by the sheer number of potential customers. It’s simple supply-side economics: When supply is constrained and demand is high, even a modest entry in the market will succeed. In other words, he wasn’t running into too many competitors because there was so much potential business to be had.

Does having an under-supply make sales easier? Sometimes, but mostly makes capturing interest easier. Sales is, and always will be, hard. And that leads us to our final point: Who is the real competition? In many instances, the real competition is none other than the customer or yourself.

Customers are the worst competitors because they must be convinced they can’t do it themselves.  These are the types who will buy IT products through retail and patch together systems with bailing wire and bubble gum. They’re cost-conscious and risk-adverse. Convincing them to abandon their DYI ways is often harder than defeating a rival in a competitive bid.

And, of course, competition is always found in the mirror. Failure to plan, focus, execute and take risks often does more to sink a business than any competitor can do through marketing and pricing.

If you focus on what makes your service valuable, you’re more than likely not going to have to worry about your competition – whomever they are.

Jennifer Anaya
VP, Corporate Marketing, NetEnrich, Inc.

P.S.  We’re finalizing our BIZ DEV webinars to close out the year. Check out our Dec. 7 event with Larry Walsh, of Channelnomics and the 2112 Group. We’ll reveal a new white paper that he’s drafted on managed services pricing.