New Competitor Strategy: How To Defend Your Business With Marketing

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Woman strategizes on paper while she works on a laptop. Closeup of her hands writing in a notepad. A new competitor strategy is key when one emerges on the scene.

In our 20+ years in the digital marketing world, we have seen one scenario play out countless times. A business establishes a strong reputation. They carve out a place in their local market. Then, the inevitable happens. A challenger appears.

When a new competitor opens their doors in your territory, the market shifts. They become the “shiny new object.” The local press covers their grand opening. The public starts talking about them. You might even see your regulars walking through their doors to see what the hype is about.

This is a critical moment for your business. The decisions you make upon a new competitor’s arrival will determine your long-term future. You need a solid marketing strategy. 

Luckily, as much as we’ve witnessed this happening during our time in business, we’ve been able to figure out what works and what doesn’t for our clients. 

Let us walk you through our tried-and-true recommended marketing strategy for combating a new competitor in your market.

The New Business Bump

It’s normal for new businesses to experience a spike when they first open. We call it the “new business bump.” You probably experienced it yourself. 

Remember that this is not a reflection of your product quality or your service. But it might impact you all the same. How much it affects you, however, depends on how you respond. 

If you don’t do anything, your numbers will likely dip. 

If you pull back on marketing, your numbers can plummet. 

Why You Shouldn’t Cut Your Marketing Budget

When your numbers dip as a result of a new competitor, your knee-jerk reaction may be to pull back. You might think your marketing has stopped working. You might want to conserve cash and wait it out. We highly advise against not doing this.

Cutting your marketing budget when a new competitor enters the market is a fast way to lose market share. In the advertising world, we look at it from the perspective of “Share of Voice” (SOV). If your competitor is shouting and you go silent, they will capture the mindshare of the community.

According to research, the more a business invests in its share of voice, the higher their share of the market climbs.

How to Adjust Your Marketing Budget

A proper new competitor strategy requires you to lean in, not pull back. You must accept that your marketing will cost more in the short term. You are no longer paying for growth; you are paying for defense.

Here’s what to do:

1. Increase Ad Budget

You need to be seen more often. The market is noisy. To cut through the noise of the “new guy,” you must increase the frequency of your advertisements by raising your budget. You need to remind the community that you are the established, trusted choice.

2. Pivot to Retention

Acquisition becomes expensive when a new competitor enters the scene. Therefore, your most efficient dollar is spent on retention. Target your loyal customers. Remind them why they chose you in the first place.

The Results

The goal of this marketing strategy is to stabilize your position. You might end up spending more just to stay flat. But in this scenario, that is a victory. 

Eventually, the novelty of the competitor will fade. They will become just another option in the market. Consumers will return to their normal decision-making logic.

If you maintain your presence, you will emerge from this period stronger. You will have weathered the storm.

Time will tell if your competitor has learned the same lesson.

If you are currently facing a new challenger and need a sophisticated new competitor strategy to protect your legacy, reach out to us here.

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