Competitive reputation describes how your competition perceives your business and can determine how they react to your presence in the marketplace. Establishing a respectable competitive reputation should be high on your priority list.
Imagine establishing a reputation that makes your competitors think twice about launching a marketing campaign that aims to capture your market share. Much like the kid on the block with the biggest stick, your competitive reputation can give you an advantage because it allows you to partially dictate the reactions of your competitors.
How can your competitive reputation help your business?
Imagine a street thug who enters into a new territory. What do you think would happen if this thug beat up every challenger that came his way? Let’s take it up a notch and say that he even aggressively seizes territory whenever the opportunity arises.
Naturally, his reputation as the biggest, baddest guy around would spread like wildfire and naturally, his competition would think twice about moving against him. They would need to plan, scheme, and strategize before carefully making their move.
When the dust settles, our imaginary thug will be in a position of strength. Have you ever wondered how Al Capone maintained his position of dominance for as long as he did during the prohibition era?
It was because he established a fearsome reputation amongst his competition. That said, the business world is decidedly less bloody then the rough and tumble world of gangsters and thugs, but the concept of competitive reputation remains the same.
Let’s say there’s a business that quickly reacts to competitive attacks that threaten its market share, ensuring that when it’s all said and done, it stands its ground. Sure, the business may lose out on short-term profit during the battle, but each time the company is forced to defend itself, it invests a little bit more in its reputation.
As this reputation grows, further attacks are less likely to occur, which would significantly increase the chances of long-term profitability.
Just like the thug who fought for his reputation, your actions will dictate how your business is perceived by your competition. When competitors decide on their course of action against your market entry, it’s your competitive reputation that will determine their reaction, and perhaps even the success of their campaign against you.
Are you satisfied with your competitive reputation?
In an age where online reputation can determine the long-term success of your business, it’s easy to forget that consumer perception shouldn’t be your only focus. You also need to focus on developing your reputation amongst your competition.
Consistency is key. Are you the type of business to take a few licks before retreating, or are you the type who stubbornly persists until your competitors back down? Given time, you’ll begin to develop a reputation amongst your competition whether you want to or not.
Think about how your competitors perceive your business, and determine if you have a competitive reputation that you’re satisfied with. If not, you’ll need to take decisive steps to establish a respectable reputation amongst your competition.