How To Compete Fairly (Even If Your Competitors Don't)

October 3, 2019

Recently, Twitter was abuzz after the CEO and co-founder of Basecamp, a project management tool, tweeted that a popular search engine’s ad practices are a “shakedown” and “ransom.”

Basecamp CEO Jason Fried voiced his opposition to the search engine using the Basecamp name in ads for competitors that ran above Basecamp’s organic search results. Basecamp has since started running its own ads to keep up.

As the founder and CEO of my company, I’ve learned that it can be difficult to navigate situations like this, as they could potentially affect your organization’s reputation. The question is: What’s the better strategy? Is it to remain silent or to address the issue and risk creating a bigger problem?

My own business has had to answer this question, though our experience has been a little different. We learned that one of our competitors was sharing false information about our company, which could have severely damaged our brand and caused us to lose business. I naively thought if my team focused on executing our plan and delivering great service, the rumors would go away.

Unfortunately, I now understand that silence isn’t always the answer. So what can a company do to compete fairly, even if its competitors don’t do the same? Every situation is different, but I’m sharing some of the things we’ve tried:

This was our initial strategy. I feel strongly that competitors shouldn’t bad-mouth one another, so I instructed our leadership team and staff to focus on our strengths, not our competitor’s weaknesses. At my direction, we kept our heads down and worked hard to build trust with our prospects and execute our plan. Yet, we continued to be confronted with lies spread by our competitor. Our silence seemed to embolden them, so we needed to refocus.

That said, taking the high road can work in some instances; it often just takes time. Your competitor might grow tired of the game, or customers might wise up to the tactic. However, my experience and my peers’ experiences suggest that this approach doesn’t work as quickly as other strategies.

2. Get the lawyers involved.

It’s possible to send cease and desist letters or even sue for slander if a situation with a competitor escalates. However, it’s important to consider the effect seeking legal action can have. For example, it can be extremely difficult to prove that you’ve lost business because of a competitor’s actions in a slander case. You also might have to get your customer involved if they are related to the situation somehow, and that’s not typically a welcome move. Taking legal action also can be expensive (trust me — I tried it).

3. Address it head-on.

This is what Fried eventually did, and he was able to do it with a sense of humor. His search engine ads now say “So here we are. A small, independent co. forced to pay ransom to a giant tech company.” In our case, we decided to address the rumors in our first meetings with prospective clients and provide details that refuted those lies.

Our approach is simply to begin a meeting as we always have, getting to know the prospect’s unique situation, explaining how our service works and outlining what makes us different. Then, we forthrightly say that the prospect might have heard rumors about our business, and we want to set the record straight. If you decide to use this approach, never mention your competitors’ names, and don’t editorialize. Simply state the facts, and offer to provide proof that your story is true. Interestingly, this has created a bond of trust with our customers, who are always grateful to know the truth.

Operating an organization with a culture of ethics is smart. Taking the high road is admirable. Yet this doesn’t mean that companies shouldn’t defend their good names. From my perspective, it means just the opposite. Your brand should be defended vigorously, not only for the good of your company’s reputation, but also for the good of the customer.

When lies about competitors are spread, I believe a little bit of the customers’ freedom is taken away because they no longer can make a choice based on factual information. At the very least, we should be offering customers a level playing field from which they can make the best decisions.

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