I was recently invited to go speak at a conference about how credit card issuers can do a better job of marketing to consumers online. The audience was full of people who, in many ways, are in competition with each other.
There's a common misconception among business owners about how competition is a bad thing. In fact, I sometimes have to spend a lot of times convincing business coaching clients that competition is actually a good thing - especially in a time when we're seeing more collaborative efforts than ever.
Even if you're not exactly collaborating with your perceived competition, there are still ways that healthy competition can improve your marketing. Here are just some examples based on what I saw at this conference.
Competition forces companies to stay on their toes.
One thing I've noticed in recent years is how there's a major rewards war going on among card issuers.
In other words, they are competing with each other to see who can come up with the best rewards program in an effort to acquire new customers.
My theory was confirmed at this conference where a major part of the conversation revolved around rewards and how consumers are reacting to them.
While we don't exactly know yet whether or not many these customers will stay on passed a year (that's when the annual fee usually kicks in), there's still something to be said about how healthy competition is forcing these companies to get creative with their products.
Quite frankly, if this sort of competition didn't exist, then companies wouldn't improve their offerings because there'd be no incentive to.
Competition breeds innovation.
Here is something I was really excited to see at this conference. Traditional banking companies are finally opening their eyes to innovation. Hallelujah!
How do I know this? Because one of the questions I got was how credit card issuers could improve their apps.
While this has a lot to do with trying to get more millennials on board with their products, there's also something to be said for competition. After all, they are all competing for the millennials.
More specifically, the tech space has played a major role in how people use their phones for just about everything financial - from micro-investing to mobile payments. This has led to consumers - and especially millennials - using alternative financial services instead of more traditional ones.
That's why a big part of their focus for traditional finance is shifting toward technology, user experience, and mobile.
Furthermore, there was a lot of talk about how credit card issuers could do a better job at educating consumers about personal finance. Many of them are already working on websites just for this purpose. Seriously, can I get Amen here?
Speaking as a long-time personal finance writer and someone who has worked on marketing teams for major financial institutions, it's about time.
And, since they are all in competition with each other, I can only hope that this leads to some real educational content that can really help someone get a better grasp of how financial products actually work.
Competition will force you to find better ways to market to consumers.
Competition is good for consumers because we have a smorgasbord of options to choose from.
This is technically bad news for companies except for one thing: it forces you to find more effective ways to market to your audience.
If you can figure out how to get an edge over your competition in communicating with consumers, then you'll be ahead of the game.
Perhaps I'm a little half glass full with my thoughts on competition, but isn't a part of running a business to find ways to improve? If competition forces you to do that, then bring it on.