If a competitor is facing hardships, it may seem like an easy opportunity to poach new customers, but one entrepreneur warns that doing so may not be the smartest idea.
Everyone within an industry seems to be fighting for the same pool of customers. When one business goes through a period of difficulty, business owners may think its customers are easy pickings, but doing so could actually end up doing you more harm than good.
While speaking on the My Business Podcast, Mat Collett, a serial entrepreneur now head of Solar D Sunscreen, discussed the recent wave of bad publicity and controversy experienced by big name brands Banana Boat and Cancer Council, and what this meant for his own business.
“First instinct is, ‘a competitor getting pushed through the media [creates an easy opportunity]’,” he says.
However, at the same time, Mat says you also want to know how the situation arose.
“Then secondly, it puts us in the same bucket. We're a sunscreen. Having big brands like that getting damaged does affect the [whole] industry,” Mat explains.
“If Banana Boat and Cancer Council – who have great names, [are] very well-respected, and fall under the guidelines of [regulators] – suddenly receive complaints from clients about having sunburn, it puts everyone's mind in doubt asking, ‘Will these sunscreens work?’”
Depending on the situation, it may be a case of all boats rising or falling with the tide, in which case it may be more difficult to poach a struggling competitor’s customers, or worse, you may overlook safeguarding your own business from contagion as an issue spreads across your industry.
Mat says that rather than capitalise on another business’ misfortune, it is more important to focus on refining your own point of difference.
“We concentrate on our claim and our statement that we let in the sunlight that allows your body to produce vitamin D,” he says.
“If we stick to that message, then we believe that we'll get over any issues that may come into the future. We know every summer, there's always going to be an article or a release on someone, some bigger company, getting hammered by the sunburn issue.”
By focusing on their point of difference, Solar D Sunscreen was able to refine its brand without harming its image.