Dealing with the competition...

[CanBritGirl]

Hi all

I am looking for some insight as to how you guys deal with your competition, whether it be local, online or elsewhere. In particular, how you deal with unscrupulous or shady practices? Do you simply ignore it and focus on doing your thing, and being the best at what you do, or do you find a way to address these practices?

I'll give a few examples to help.

Example A: you have a competitor in your local market whose advertising consists of loud claims of being "the best dive shop in X" or "the #1 dive school in X". Which no basis on which to make this claim (i.e. no awards won, no subjective ranking system in place, no method of comparison, etc). Do you ignore it or do you find a way to call them on it?

Example B: a competitor advertises a $99 open water course. If you, knowing what you do about the course requirements, delve into it, you find that actually when all the required bits are added on, their course adds up to over $500. But all of their advertising is completely misleading and focused on a $99 certification course, when in reality, for $99 students get in the pool with no gear, no PADI materials, and dives and no certification. Do you find a way to call them on it or just ignore it?

If you are focused on being ethical and following all advertising guidelines and rules, do you feel that you are being penalized for not doing as others do? Or do you figure that consumers see through this and chalk it up to buyer beware? Do you just accept that it will come back and bite them in the end?

What is your approach to dealing with shady competition? Just looking for some insight as to your approaches.

We want very much to work co-operatively with other dive shops, and don't really want to create an adversarial community. However, sometimes I wonder if it's worth rocking the boat from time to time when things start to get out of hand in the competitive landscape.

Thanks in advance!

 

[Jim Lapenta]

This is a tricky area to play in. It's one thing to deal with shady operators that advertise these 99.00 courses. It's another if they are doing things that are truly unsafe. Those you call out and report.

How I have dealt with the shady ones is to point out to anyone who calls, emails, etc. that my course is all inclusive of books, pool time, rental gear for the pool, and anything else that may be included. And be right up front that other things like having their own gear and that rental gear for checkouts is extra.

Another area is the content of the course. I will not, cannot, do not want to, teach a one or two weekend short abbreviated class that over task loads the student, does not give them everything a diver needs in terms of skills and education, and is nothing more than a money grab.

As such my course is 32 hours plus checkouts. That's by standards. 16 classroom, 16 pool and includes rescue skills, deco planning, and is focused from day one on buddy skills, buoyancy and trim, and producing a diver that I would let my kids dive with the weekend after checkouts with me not there.

We have less than stellar vis at our local sites so blacked out masks in the pool come into play in at least one session. I still teach buddy breathing. I've seen the state of rental gear in some locations. I don't train vacation divers. I mean I do but not to be vacation divers. I train them to dive in our local conditions and if they feel they don't need that much training they can find another instructor.

Since I am an independent and don't do this for a living I can afford to turn people away and have done so. Funny thing is some come back later for more training via courses and non cert workshops after not getting their expectations met and comfort level where they feel it should be when they went elsewhere.

Since I teach OW through SEI I am not restricted to materials the agency puts out. I do use them but also supplement with my own book and materials and point that out as well. Students get some information in their OW class that they don't get anywhere else. This is a big draw for me on other classes as well. SEI requires us to exceed standards and to add any material we feel is necessary to create safe divers in our local conditions and to test on that material. I point this out as well.

One of the most useful tools I have with students is checkout dives. Especially when shops and instructors who are not as thorough or intense are there. I don't need to say anything. It becomes clear to my students, and sometimes the students of the other shops, why I teach the way I do. Sometimes the difference is actually distressing when you see people who really have no business in open water yet struggle through checkouts. Or get rushed through them.

You don't need to say anything. Lead by example. I've had students come up to me in front of the instructor they were there with and ask for my card and when my next class is. That goes over well.

I do cooperate with three other local shops. The other 3 or 4 won't even talk to me. The ones that do get referrals for gear and classes I don't offer. They get my business for fills and maybe gear they carry that I want but can't get at dealer level. In return they send me students who want the kind of classes I teach. What they also do, as do I, is support other local independent instructors. With actual deals on personal gear for the instructor, provide air fills and rental gear, and one makes his pool available at reasonable cost. IF the instructors students end up buying gear from the shop pool use is free.

As a result the shop gets a good reputation and business they otherwise would not have seen. These independent instructors go out and find students. They then bring them to the shop for training and gear. This one shop with the pool has six independent instructors plus two shop instructors from 6 different agencies that all work together for the good of each other. That is why he succeeds and has opened a second location.

 

[mjrob]

In a perfect world, we'd all just get along and, to a degree, support one another. In a perfect world. Unfortunately, that ain't the case.

We have a "competitor" (well, a couple really) who act much the same way when most of his/her boasting is simply a boatload of embellishments and, sometimes, out-and-out lies. I think most of us face the same thing. In the long run, I believe the high road is the one to take.

People really don't like the bait-and-switch schemes you're describing and, in the end, will quite likely become your customers anyway...provided you don't stoop to the competitions' level. When presented with the pricing promises of the competition, just be sure to explain exactly what your price includes, that you'll always be honest and up-front with your customers and that you want them to be a long-term part of your store family. Don't be afraid to encourage them to confront your competitor about his/her real, total pricing and, if necessary, send them back there to discover the truth. Many--actually most--of them will, instead, sign up with you as opposed to going back to "the other guy." Don't be afraid to do this and remember, if price is the sole determining factor (even if the price isn't real) in a buyer's decision, you might want them to be someone else's customer. You have a duty to your business to make that sort of determination.

This is your first opportunity to establish a level of trust with a new customer. Your honesty over their trickery will go a loooooooooonnnnngggg way...in your favor.

The cheapest is, in my experience, seldom--if ever--the best buy. Nor does it engender loyalty from either party.

Mark

 

[clint@uniquescuba.com]

1. Marketing Claims

As for your competitor making these marketing claims about being #1, I don't think you should waste any time dealing with that one.

Marketers lie for a living and you can really do nothing about it. Attacking your competitor will likely backfire and make you look bad yourself.

2. $99 Scuba Classes - this is one I have studied and played with for years

I have seen several variations of the advertised $99 scuba class over the years and have been appalled by many and impressed by a few.

Not knowing how your particular competitor is advertising and executing this program I cannot know if they are being unethical or simply fulfilling an unmet need for the consumer.

I started working professionally in the dive industry around 1995 and back then, I thought there was only 1 way to sell and teach SCUBA. It seems the entire Scuba industry believes there is only one way to ethically teach scuba.

All-Inclusive Group Classes

After a few short years in the business I realized the last thing I should be doing is taking my marketing and business decision cues from inside the scuba industry itself.

I would get business advice constantly from equipment and training reps ( most of which had diving businesses of their own that went belly up)... go figure?

As ebay and internet retailers started to explode and gain market share, I watched my industry peers take it all out on their customers.

The would make statements and do things like:

- "Try getting your air fills on the internet!"
- buying on the internet is supporting black market goods
- If you take lessons from me you have to sign this purchasing agreement
- Oh, you bought equipment online... Here's a refund for your classes, see ya!

As a whole, instead of changing and adapting to the outside world, they decided to treat customers like personal property....

So, when I first started seeing these $99 classes popping up I started paying attention instead of putting my head in the sand

At the time I worked for a dive shop chain throughout the midwest and all the store managers would have weekly conference calls. Eventually, several of the store managers had competitors that did the $99 class thing. Everyone would get all worked up and talk smack about the competing store, how it was sneaking up on people, unethical, the wrong thing to do. But, we never did anything about it.

These conference calls would leave me shaking my head constantly.

You see, everyone would stand on their soapbox preaching how unethical $99 lessons are, then turn around and make customers sign purchasing agreements that stated the customer HAD to buy equipment from THEM....WTF?

I digress, back to the $99 scuba class. I look at this system 2 different ways


1. Misleading and Shady - Selling the class for $99 and giving the customer the impression it's an all-inclusive price


2. Addressing an Unmet Consumer Need - Developing a modular pay-as-you-go system that helps lower the upfront monetary hurdle the customer has to surpass just to see if they like scuba.


Looking at option #2 you might ask yourself these questions.

1- By separating the training into 3 modules that each have associated costs, do you help lower the entry barrier for new students?

2- If charging an upfront All-Inclusive price and Selling Mask, Fins, Snorkel are you creating a much higher entry barrier for new students?

3- After collecting the All-Inclusive class fees upfront, and when your occasional student decides to complete checkout dives via a referral, do you then refund that portion of the class so the student can use it to pay the referral instructor? ....... or do you keep it even though you're not doing the work?

4- In a modular program, the student does not pay check out instructor fees upfront. In a referral situation, they then save that upfront cost to pay the referral instructor. Would this not be more ethical and build a better value to the customer?

5- Every other Academic Institution on the planet is modular and separates Tuition, Books, Housing, Food, Lab Fees, extra required equipment. Why are we so special?

6- Like me, if you were to list all modules and associated costs on your website and cover them on the phone as well as include them inside the student pack, would it be unethical or just good business?


Hopefully this might shed a different perspective on such a system.

 

[RJP]

What is your approach to dealing with shady competition?

Don't wrestle in the mud with a pig. You'll just get dirty... and the pig likes it.

As to the "#1" and "best" claims, having spend 25 years in marketing and advertising I can tell you that the only time I've seen that work is on healthcare products with claims like "#1 Doctor Recommended" or similar. A person of authority saying you're #1 is meaningful. You saying you're #1 is meaningless.

This is even more true in our world of on-line reviews. If a customer hears him say he's #1... and then can't find scads of online reviews backing that claim up then it's instantly untrue.

Unless every single person within 60min drive of your shop is a certified diver... he's not your competition.

 

[oly5050user]

do not care a rats a** what other dive shops are doing..just do what you do the best you can..we have at least 5 if not more stores within 30 minute drive from us. they are not the competition. golf,sking,any other recreational activity is.. one lds that made the "we are the best, most experienced, whatever" claims closed don,went out of business. there is another ready to do the same as they are months behind rent and electric bills.

 

[RJP]

do not care a rats a** what other dive shops are doing..just do what you do the best you can..we have at least 5 if not more stores within 30 minute drive from us. they are not the competition.

Bravo!

golf,sking,any other recreational activity is..

I'm very interested in this concept and in further pursuing this line of discussion. Instead of hijacking this thread, I'd like to start a separate discussion thread in the next few days.

As you may know, I've recently "quit my day job" to join the dive industry, having started a marketing consultancy. My focus is on the higher-order "strategic" marketing things; market segmentation, positioning, messaging, etc. I would love to help the industry figure out how to "sell more scuba diving" but the first step is understanding what market we're in... and who the competition is. From what I can tell after attending DEMA, meeting with marketing folks from most of the big players (and small) and spending much of the past 8 years of my life on SB... the industry has no idea what business we're in. (It seems that the market research - the RIGHT market research - has never been done.)

If we don't know what business we're in... how on earth do we know who our competition is?

(And here I promised not to hijack CanBritGirl's thread.!)

 

[Wookie]

First of all, send some business your competitor's way. Really. There is something they do better than you, and scuba is the service industry. The idea is to give the customer the best service you can, and they will remember you for it. And, it will confuse the crap out of your "competitor". Or, maybe you are the best at everything, therefore you can explain to the potential client why and how. My direct competitor enjoy a great personal relationship, because he is excellent at what he does (spearfishing) and I am excellent at what I do (everything besides spearfishing). When someone calls me up wanting a spearing charter, I send them to Rick. I don't want to learn that new trick. He has it down. He, in return, sends me the charters that he doesn't want.

 

[RJP]

You could also send the competition the pain in @ss customers. It's a win-win... or maybe just a "win."

A buddy of mine used to have a potential client who would always ask my buddy for a quote, and then always use my buddy's quotes to get a price match from another specific supplier who would give the store away to get volume. This client ended up being the other supplier's biggest account.

The industry was such that everyone knew what the underlying costs of goods, service costs, profit margins, salaries, etc were.

So... my buddy started giving this potential client quotes that my buddy knew would be well below his competitor's ability to make any profit. He figured if the other company was going to steal from him... the other company might as well go broke doing so.

Took about a year, but the other company eventually lost this major client because they could not staff the account and service them effectively at a loss. This potential client became my buddy's biggest client almost overnight... at my buddy's premium price.

Seems the potential client learned an expensive lesson about buying services on the cheap...

 

[clint@uniquescuba.com]

Bravo!





My focus is on the higher-order "strategic" marketing things; market segmentation, positioning, messaging, etc.

If we don't know what business we're in... how on earth do we know who our competition is?

I agree with this. I'm not very optimistic when it comes to the majority of this industry understanding this.

However, it was refreshing to see this article just published by SDI/TDI

https://www.tdisdi.com/segmentation...m_campaign=December_Members_News_-_2014__1269