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Be Two

Cinda Baxter -- Gifts and Dec, 12/1/2011 2:00:00 AM

Two years after I opened my store. A crosstown Competitor known for deep Discounts moved in across the street.
This marvelous event coincided with my breakup with a boyfriend of three years the day before my birthday. Not a weekend I remember with fondness. While our stores were wildly different in appearance, the product selection was nearly identical - unlike her original store, this one duplicated the majority of lines I carried, including many that don't show at major markets. I'd been shopped. Hard.
The day she opened, I had lunch with a marketing guru friend who didn't fall for my Susie Sunshine act. Thanks to Al's carefilled prodding, I poured my heart out, mortified that a competitor had opened under my nose, knocked off our selection, whacked prices to bare bones and was going to eat my business alive. The breakup I could survive; but not abject financial destruction.
Which is when Al taught me one of the most valuable lessons I've learned.

Go for two
"A successful business is one of three things," Al said. "A quality leader, price leader or service leader. Only the very best businesses manage two of the three... but no business can be all three at once. You've built a reputation for high quality products, selection and atmosphere. You've got the best customer service around. So yeah, she's got you on price. Big deal. You smoke her on quality and service. Eventually, the novelty of a new store will wear off and customers will see what's missing."
I wasn't entirely sold, but several months later, our business shot back even higher than before, proving him right. With a less attractive option nearby, consumers had something to compare us to... and the comparison swung heavily in our favor.
So, did I just sit back and wait for things to turn? No. Together, Al and I formed a game plan that mitigated her "price leader" advantage, positioning my store for future success:

Don't sink to the bottom
Fear is a nasty bugger, tempting us to trash talk the other guy. No matter how true those statements are, you can't let yourself utter them - not even to employees. Your tone, no matter how well-intended, will come across like sour grapes, making everyone wonder what the other guy offers that has you worried. Instead of focusing on what your competition is doing wrong, talk about what you're doing right - times 10.
Stand on your merits. Blow your own horn. This is not the time to soft peddle what sets you above the rest.

Decide which lines you can live without
If a nearby store sells the same items at a significant discount, identify the overlap, then divide the resulting list into two columns: (A) vendors you'll fight to keep and (B) the ones you're willing to drop.
     Before contacting A List vendors to request territory protection, prepare to justify your position. Pull together reorder and payment records, get someone on the phone as high on the food chain as possible and start selling. Be direct- - ask them to honor your proven commitment.
     If they're not willing to repay your track record of dedication with dedication of their own, find a new vendor who will.
     If they waffle or try to convince you it's okay to have two stores sitting on top of each other selling identical products, move them to List B... then move everything on List B to clearance. The sooner you squeeze money out of that inventory, the sooner you can open new accounts.

Paint a wall
Painting a long wall a new color, changing the layout of the entire store and replacing aging store signage with new are all big things that linger on To Do Lists. Pick one. Then do it.
Nothing snares customer attention more than an unexpected physical shift. Oddly, they'll think you have all new inventory too - a bizarre anomaly that's been proven repeatedly, and works in your favor.

Be sure you're hitting your two
To keep competitors at bay, you'll need to consistently excel at two of the categories Al mentioned - one alone won't cut it.
Start with the basics: clean store, bright lights, quickly answered phones, displays that constantly change and full-on-no-holds-barred attention to every customer that walks through the door.
Time is on your side; the newness of the other store will wear off. Take a breath, and don't second guess yourself. This is your game to win.

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