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How to stay ahead of the competition

looking for some ideas to an interesting problem

7:41 pm on Apr 1, 2004 (gmt 0)

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I have an interesting situation and wanted to get some input. In a nutshell, here's the scenario.

I operate in a highly-competitive niche, where I am currently the #1 site in overall sales and profitability.

Lately my competitors have been trying everything they can think of to grab some of my market share. Bogus bonuses, ridiculous claims, outright lies, stealing my content, copying everything I do, you name it and they are doing it.

Priority #1 for me right now is figuring out how to keep plenty of distance between my site and theirs, so that their efforts don't ever make a significant dent in my overall profitability.

I really don't want to resort to most of the tactics they are using.

One thing they are doing, which is fine, is that they are trying to compete on price. Most of them are desperate for sales so they are trying to undercut my price and/or pay affiliates even more than I do in order to try to grab some of my affiliates.

Would I be better off just paying my affiliates the absolute most that I possibly can, more than any of my competitors? I can pay more than anyone due to my huge volume, and still make plenty of money.

This may effectively put several of my competitors out of business because no one in their right mind would continue to promote their sites. The only "problem" with this is that once I raise commissions I can't really ever lower them back down. It would be a permanent thing. Lowering commissions is probably the worst thing I could ever think of doing in terms of keeping my affiliates happy so that would never even be an option once it was implemented.

Another issue is the whole thing about a unique selling proposition. We all pretty much sell the same product, and it's hard to differentiate. My brand is starting to solidify, but most everything I do my competitors immediately copy. I guess the key is to somehow come up with something that they can't copy, right?

One thing that really irritates me is that some of them are resorting to outright lies and ridiculous claims in their salesletters, and offering outragious bonuses at order time. But human nature being what it is, many customers who sign-up don't ever get around to asking for a refund when they are disappointed and so overall my competitors benefit from increased sales.

I really don't want to stoop to their level, but how do I compete with this type of thing? Most of these other sites are fly by night type of sites that could care less about their reputation, etc. and are just trying to make a fast buck, whereas on the other hand I'm trying to build a brand and a long-term business.

I would love to hear your input. I know there are a lot of very sharp people here so let's hear what you think.


7:53 pm on Apr 1, 2004 (gmt 0)

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Hey, i know it sounds crazy, but how about raising your prices. Your the market leader. When everyone zigs, it might be time to zag.
7:58 pm on Apr 1, 2004 (gmt 0)

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I'm (thankfully) not in such a highly competitive environment like you are. But what has worked for me is building a "background information" area on my site.

On that section, I have plenty of information, whitepapers, case studies, glossary, etc. on the whole area where me products apply - even if only remotely. Given the popular example of "blue widgets", in my "background information" area you would for example find an historical abstract on the color blue, texts on chemical and biological agents which produce blue color, and etymological note on the word "widget" and probably something on "violet", "orange" (complimentary color of blue) and "gadget" as well.

This will give you:
- extended visibility in search engines
- defining you as "authority" on your subject
- extended traffic on people remotely interested but maybe "converteable" into customers
- a way of simply growing your site on a daily/weekly/monthly basis - so even if your competitors copy this as well you can always be ahead of them

Hmm... I hope you are not into the "herbal pill" business to enhance certain body parts :-)

8:27 pm on Apr 1, 2004 (gmt 0)

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Not knowing your product and marked makes it difficult to be precise. I hope I donít bring your attention to something brand new, but her is my 1 cent.

1. Keep your present customers happy. Mouth to mouth is a powerful advertising tool.

2. Keep your partners happy. See if you can find ways to network with your partners, preferably in a way, that will create more partners to your network.

3. Keep analyzing your target group, see if you canít enlarge this group or refine your understanding of it, enabling you to better target it. Analyze your present customer group to spot new target groups.

4. Keep working on your SEO. Analyze your keywords in order to spot new possibilities. Consider creating more websites to better appeal to segments in your target group. The different websites can compliment each other and create added value.

5. Find new markets. The web is world wide, maybe your product will sell in other countries as well. Consider creating national websites in other countries as well. Translated into local languages and marketed in the national SEís. Being THE big international player in the market might raise you to a different level and will give you an advantage in most SEís

All of the above is an ongoing process

8:33 pm on Apr 1, 2004 (gmt 0)

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I've seen plenty of affiliate programs have a "bonus" time where they raise their commission for a short period of time.

You could also just approach your best affiliates and offer them a larger cut.

3:20 am on Apr 2, 2004 (gmt 0)

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What sort of product do you sell? Is it wholly a commodity or can added value be found through service and support?

3:38 am on Apr 2, 2004 (gmt 0)

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Negotiate an exclusivity contract with your affiliates.

Pay them more if they promise not to advertise your competitors for a period of time.

Make it extra juicy and a yearly contract that will need to be re-evaluated in a year or so.

12:27 pm on Apr 2, 2004 (gmt 0)

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Guarantee the lowest price, e.g., "We will beat any competitor's price!"

When the prospective customer contacts you about the competitor's better deals, you can tell them why your company is better.

I wouldn't pay affiliates any more. I'd cut the price instead. Have two day sales of some kind. Seems to me this would be easier to manage.