It’s a very competitive world — and it has been for a very long time. I’m guessing that it’s a lot more competitive than what you think. Sure — you know the dealer across town who’ll take a lower margin, or you know the other companies who manufacture stuff like yours, or the other companies that you’d have to be Helen Keller to miss.
But there’s tons more competition keeping your customers’ money from finding its way into your bank account. When Quicken started, their main competition was a calculator, not other software. Starbucks’ competitor was the nasty coffee pot in the break room. With one major customer who had boatload of market share in a different category, we determined that their biggest single competitor was non-consumption. If you sell UTVs, one of your low cost competitors is a wheelbarrow.
It pays to pay attention to the other things your customers spend their time or money on. You’ve got to be able to make your customers want what you’re selling more than a new flat screen TV or those new Gucci loafers. We’re all competing for the same scarce dollars. Let’s face it, we sell discretionary products. It’s worse for me — I sell discretionary products that are accessories for a bigger discretionary product!
We look at the competitive landscape for our Seizmik accessory business and it’s easy to see a handful of very worthy direct competitors. It’s also pretty easy to recognize that our biggest competitor is Pure Polaris. Just like in the vehicle category, they’re the 800-pound gorilla of the accessory category, too.
In the UTV category, if you’re not a Polaris dealer, Polaris is coming after you in a big way — but you probably already knew that. If you ARE a Polaris dealer, Deere is coming after you. In fact, Deere is coming after all of us in the UTV business — in every aspect of it, every nook and cranny.
It’s easy to stay focused on the powersports category and to think that your competitors are confined to the handful of companies that sponsor racers with tribal tattoos and soul patches. But UTVs aren’t confined to such a small universe. Their inherent utility lends them to other market spaces and categories. Bigger, more stable, more global market spaces. Deere has set their sights our favorite (only?) growth category, and they’re not messing around. They still call their vehicles “utility vehicles” while most of the powersports guys call them “side-by-sides.” Deere’s market cap is $31.7 billion and sales of $32 billion; Polaris’ market cap is $5.07 billion and sales of $2.6 billion.
It’s been easy to ignore the Gators for the past couple of years because they were, well … un-good. Not true anymore. They’ve got good vehicles and a great lineup; they’re one of the best brands in the world with the most loyal customers. They’re marketing very aggressively. Many customers will buy Gators without ever even coming into a powersports dealership or considering any other vehicle.
Deere is going to be a huge competitor in the UTV space — let’s broaden our focus. They’re coming after our customers.
Steve Shankin is founder/president/CEO (Chief Executive Optimist) of Seizmik and its parent company, Vialink. As a result of his big brain (read: luck), he got into the UTV accessory business in 2002, well before it was what all the cool kids were doing. His companies have designed whole vehicles and extensively studied how consumers use UTVs. He still calls them “UTVs” and not “side-by-sides.” He’s a father of three girls, competitive cyclist and not a very good cook but he keeps on tryin’ anyway.