Competition and complacency

Do you hear bad things about your competition? Does that make you feel good?

Ooh they're dreadful aren't they! shocking service? not returning calls? poor value for money? questionable ethics? just didn't know their stuff? blatent incompetence?

And then there's all the wonderful feedback you get from your own clients or customers. "Why, there was that lovely email we got just 2 months ago, and we've had 3 others this year just like that."

We lap up all the above. We want to believe that this presents a true balanced picture of how much better we are than our competitors. So we do: we do believe it. We believe that we are just naturally good at client service, even though to be honest we don't put much effort into it. We're just naturally lovely, conscientious customer and client-centric people I suppose.

Get real

Or could it be just an illusion, based on the selective nature of what we hear?

When we hear about competitors, it will often be from people who are disappointed with them. Or why else would they be talking to us? Our competitors still have their happy clients: we only get to speak to the disappointed ones.

The fact is that all businesses have some happy clients and some disappointed ones. Some are very disappointed, and they are very vocal about this. We've all heard about how satisfied customers tell few people but dissaisfied customers tell many.

The vast majority of businesses have many, many more happy customers (or they wouldn't be sucessful). But because our competitors' unhappy customers are more vocal, and because they come to see us as an alternative, we get a distorted perspective on the qualities of our competitors.

What about us?

The feedback you get on your own business may also be selective. Most people don't complain, they just don't come back. Seriously: you are unaware of the vast majority of client/customer frustration and disappointment. Even where you ask, through regular client surveys for example, many people hold back on communicating their frustration - because what's the point? Most client surveys are also inherently biased because they only target existing customers, who presumably are still, on balance, satisfied with you. To get a true picture you also need to speak to lost or unconverted customers/clients.

We also have a natural confirmation bias towards positive feedback because we have a natural need to be loved and appreciated. We make dubious self-justifications.

• Positive feedback? - absolute valid!
• Negative feedback? - No totally unfair! They've got that wrong! I didn't! They don't understand!

Pricing

We may also get a distorted picture on competitor pricing. Clients are interested in lower pricing and for that reason they are more likely to mention lower competitor pricing, and we are more likely to hear about, and be sensitive to, the competitors who may be cheaper than us.

Price-sensitive clients are also more likely to mention price than those that aren't. This can also give us the impression that price is more important than it is. If clients are happy with our price, because we are cheaper than some others, we might not always hear about that.

It is easy to get concerned when clients regularly suggest that your prices are too high, but don't over-emphasise the extent of this. A successful business should aim to have a minimum of 10% of customer turn them away on the basis of price. if you do not get at least some people turning you away on price, you are not charging enough.

Add to that the fact some people will look to negotiate price even when they are happy with the price (maybe 10% of people are instinctive price negotiators).

Get a balanced perspective

The fact is that unless we make a real effort, it is highly likely that we are getting a distorted impression of the quality of our service compared to our competitors, and also a distorted impression of pricing, leading to an underestimating of any 'market rate'.

The imbalance in positive/negative news we hear can then be distorted further by our own biases, needs, anxieties and interpretations.

Make sure you get a balanced perspective on how you compare to competitors, particularly in relation to the customer/client experience.

• conduct regular client satisfaction surveys
• seek similar - or more extensive - feedback from lost or unconverted customers and clients
• speak to referrers and others who are likely to hear a broad range of feedback on both you and competitors
• resist the instinctive urge to justify away negative feedback: learn from it!