Why You SHOULDN'T Try to Be Better Than the Competition

Outperforming the other guys can be very bad for business. How to take a smarter approach to winning clients

Written by Lisa Shepherd

In the business world, companies can’t help but compare themselves to each other to get ahead. They figure, “If Company A can deliver on a three-week lead time, we should deliver in two and a half. If Company B can provide their service for $1000, we can do it for $900.”

Sound familiar? It’s certainly one way to get business. But it’s also a guaranteed way to make less money for the same (or greater) amount of work. It ends up being a race to the bottom. By striving to underprice and outperform their competitors, companies can increase their pace and decrease profitability, with no guarantee that one of their competitors won’t do “better” next time.

In my experience, there’s a much more effective way to compete than trying to one-up your competitors. Don’t be better; be different.

When you try to compete on the same offering, it’s easy for clients to do an apples-to-apples comparison and simply pick the supplier with the cheapest price. But offer something different and there’s no basis for comparison.

You don’t have to offer a completely unique product to be different; you just have to think differently.

How thinking differently can work for a B2B company

An accounting firm might charge a client $5,000 for a financial statement package that includes a set of Notice to Reader accounting statements and CRA filings. To compete on price, a second firm might offer the same services for $4,500. A third might propose $4,000, and so on.

But what if a fourth firm came along with an alternative model, charging $500 a month for a small business accountancy service. The package includes a monthly set of best practices and a seminar on how small businesses and their owners can improve their tax situation (with advice on everything from SRED to estate planning), an on-demand advice service when owner-operators have a an accounting question and year-end financial statements.

In this scenario, there’s no way for customers to compare based on price, since it’s a completely different model. And even though the total dollar value is actually higher than what the competition is proposing, it’s more appealing because it provides so much more value, and the payment is spread out in small amounts over the course of the year. That’s more palatable for small businesses.

How can you apply that kind of thinking to your own business? Ask yourself: what can we offer that’s different? Think about what your customers really need that they’re not getting from anyone else, then set up your product or service in a way that delivers on those needs in a way that your competitors don’t. When you differentiate, you get out of the downward spiral that comes with like-for-like competition. When you make it harder for your potential customers to line you up in a beauty pageant against other service providers, you’re far more likely to come out the winner.


Be Unique Even If Your Offering Isn’t

Do You REALLY Know What Your Competitive Advantage Is?

8.75 Steps to Launching a Unique Business

Lisa Shepherd is author of Market Smart: How to Gain Customers and Increase Profits with B2B Marketing and president of The Mezzanine Group, a business-to-business strategy and marketing company based in Toronto. She was the youngest female CEO of a PROFIT 200 company in 2007 and 2008 and is a frequent public speaker on B2B marketing strategy and execution.

More columns by Lisa Shepherd

Originally appeared on