Your customer is your biggest competition?

I regularly have conversations with businesses about their positioning (you can read an article I wrote for Yahoo! on positioning here: http://newsletter.smallbusiness.yahoo.com/0807_wh_create.php) and in these conversations I always ask people what their competitive situation is – who are their competitors, how do they compare, what’s the perception of each company, etc.  And often, I hear things like, “Well, there’s so and so, but they’re really terrible at service.”  Or, “There’s these guys, but they don’t offer half of what we offer!”  Sidebar: Well, the competition must be doing something right to succeed, right?!  But that’s not really my point here….my point is that sometimes your standard competition isn’t the real competition, and yet people very rarely think about the competition as being a customer’s state of mind.  In selling services or a new software, your customers can generally choose to keep doing things the way they’re doing them (without your products or services – I mean, somehow they’re getting by without you, right?!), so you really need to prove to your customers that you have meaningful reasons (dollars they can save, time they can save, etc.) for them to purchase what you’re selling.  This is why your messaging in your marketing materials is so important.  You need to not only make sure that your differentiators position you clearly from your standard competition, but that they also connect with your customers explaining why your services/products can change their world for the better.  Next time you’re thinking about the competition, take a moment to think about your customers’ state of mind - overcoming this is the key to selling your products/services, especially if you are filling a market gap that has yet to be established.  In a packed market space, your differentiators over your standard competition are invaluable, but in a market space where you are really cutting the way, how you connect with customers and explain your value can even be more important than anything else.