Some years ago, I was asked to help a startup business set up their bookkeeping system. (I have a degree in accounting, and the guys running the business were friends of mine, so the request wasn't as farfetched as it might seem on the surface.) I helped them set up their system, gave them a few bits of unsolicited advice and wished them well.

Some of my advice, they took to heart. Some they ignored. Naturally, I'd like to think if they'd paid attention to all of it, they would have been better off. Unfortunately, one of the bits they ignored was a real biggie.

You know what the biggest problem with this business was?

They weren't really trying to succeed as a business. They were, rather, focused almost entirely on "one-upping" a company they perceived as their chief competition. For some reason, the partners in the start up business all disliked the other business owner intensely and couldn't stand the thought of him beating them out in any way.

So, why was that a problem?

They tried — right from the get-go — to compete with this other company on every front. The other company had new snazzy offices; the start-up needed a large, well-appointed office, too. The other company had administrative staff; the start-up had to hire an office manager right away. The partners were determined their prices would be lower than those of the established company, and their employee salaries would be higher. (You can probably see where this is heading...)

Of course, this ignored that the way the established company had grown to its size was by starting small and only taking on more overhead as the business growth could support it. In fact, for the first couple of years of operation, the company consisted of only the owner and his brother-in-law, and they had worked out of the company owner's garage. It took them years to build up to the point where they could afford those luxurious offices and administrative assistants and all.

At first, things seemed to be going well. The start up got a bit of business as a result of their below-market pricing, and they pumped themselves up with daily pep-talks on how badly they were "hurting" the competitor's business and how the other business owner must be grinding his teeth over their "success."

As I'm sure you've probably already guessed, though, the start-up soon found themselves in trouble. Their high overhead ate up all their revenue, which was limited in the first place by their low-price policy, leaving no money to compensate the partners. One partner bailed out early. Two of them ended up taking on second jobs to make ends meet. The fourth rode the sinking ship all the way down, apparently convinced to the end that he could turn it around through sheer force of will.

So how does this relate to search engine optimization?

Have you ever insisted to your SEO that you MUST rank highly for a particular target phrase — without regard for whether that phrase is actually valuable or even particularly relevant, but rather simply because one or more of your competitors rank well for the phrase?

Have you spent an inordinate amount of time going over your competitor's website with a fine-toothed comb, trying to ferret out everything you think he's doing for optimization, then demanding your SEO implement all the same things on your site?

Have you ever posted (or considered posting) on an SEO advice forum anything along the lines of, "My competitor is doing [insert description of questionable tactic] on his website. He's ranking really well. Is it okay if I do the same thing?"

Sure, keep an eye on the competition. And if they have what seems to be a good idea, feel free to see if there's a way to adapt it to suit your business.

But don't slavishly follow everything your competitors do — online or in the real world. You may be in the same line of business, but each business faces its own set of challenges and has its own set of resources to bring to the table. What works for your competition may not work for you. Imitation may be the sincerest form of flattery, but it's no way to run a successful business.

Keep an eye on the competition, absolutely. But make sure you keep your other eye on where your business and the overall market are going. With both eyes focused only on the known competition, there's no way for you to see the new competition rounding the corner, or the Next Big Opportunity coming down the pike.

It's a mistake to concentrate entirely on matching the competition's tactics step-for-step. Focus instead on simply making your web site (and your business) the best they can be. You just may be surprised one day soon to find you've got competitors focused on catching up to you.

April 3, 2007

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Search Engine Guide > Diane Aull > Are You Building a Business, or Just Chasing the Competition?