Competition a tool for growth, not death

Competition a tool for growth, not death

Businesses should be embracing competition as a tool for growth and innovation, rather than putting their efforts into fighting that competition on price.

That is the view held by young business owners Raph Freedman and Lachy Rowston, who own three CrossFit Creature gyms in the highly competitive inner-Sydney market.

“When you start owning a gym and another gym opens up really close to you, I’m filthy and I’m, like, ‘You are trying to take all the money out of my bank account and all the food off my table’,” said Raph.

But he admits that such feelings can be used to drive customer value or to focus on what the competition is doing, ultimately at the expense of your own business.

“It’s a really, really different mindset. I think that sort of mindset does help [our] gym sometimes because it spurs you more into action rather than thinking, ‘Oh, that’s cool’; you really go to work.”

This approach led them to specialise in crossfit training as a means of overcoming the heavy saturation of full-line and 24-hour gyms.

“In our industry, with CrossFit gyms and coaching-intensive businesses, you’re not playing with anything more than maybe 150, 100 people,” Lachy said.

“If you look at the gyms like Anytime Fitness or 24 Hour Fitness, Fitness First, they’re contending with tens of thousands of people. There is a lot of aggressive competition.”

However, Lachy admitted that focusing too heavily on a particular niche can equally lead down the path of business failure.

“So you can compete, but if you compete too hard, you’re just fighting over a very small pool of people,” he said.

“We don't compete that hard, directly against these other gyms, just because we know we’re approaching our limits anyway. It’s not going to do any good to go over there and slag them, and it’s not going to look good on us.”

As such, rather than trying to bring in every single new customer possible, Lachy said they focus on being the best in class at their particular niche – which includes turning away prospective customers that are not a good fit.

“When people [like that] come, I’m like, ‘You’re not really a good fit, but you should try the gym down the road. They’re going to be a better fit for you’, just because I know they won’t fit in with what we do,” he said.

“That seems to work really well.”

Hear more insights on building a business that can thrive amid intense competition on the My Business Podcast below:

Competition a tool for growth, not death
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