You already know the recipe for business success: Create a product or a service that people want, make it better than what the competition offers, and then sell it for a lower price. Simple, right?
Not so fast. What if your competitor is lying to the customer? What if they're claiming that their product has functionality that it lacks, or that it's high quality when you know that it's actually a piece of junk?
If customers buy from that competitor, they may eventually find out that they were snookered...or they may not. And even if they do, what if you're no longer in business because your competitor drove you out?
So what to do?
One approach would be to outdo the competitor and tell even bigger lies. That's pretty much what happened in the mortgage business before the Great Recession. What started as a few bad apples eventually rotted the entire business.
But think: Do you really want to build your company around lies? Especially when you've done the hard work of building the better mousetrap?
Another approach would be to accuse the competitor of lying. Such accusations, however, seem self-serving and can easily degenerate into he-said/she-said situations that make you look like the bad guy.
A better approach is to give your customers a tool that will flush out the lies, according to Bob Carr, chairman and CEO of Heartland Payment Systems, one of the country's largest credit-card processors.
Carr recommends providing customers with a "bill of rights" that identifies what they should expect from their vendors, such as transparency of testing results, auditable accounting for inventory transfers, and so forth--emphasizing areas where you're certain your competitors are fudging.
Once you've provided your customers with this tool, "all you need to do to secure their business is fulfill the promises inherent in the 'bill of rights,'" explains Carr. At the same time, your competitor will be forced to struggle to meet those promises, thereby giving the competitive advantage to you.