How Your Small Business Should Handle Copycat Competitors

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

I still remember the great plagiarism lecture from high school – this was in the early days of the internet, and our teacher said, “If you rip a report off the internet and use someone else’s work as your own, that’s a legal violation!”

Now, when it comes to a school report, it’s pretty obvious when someone is copying you. But in business, that’s not always the case, and while many copies are being made, the legality of copying is up for debate.

Sometimes, it’s quite cheeky. But other times, your imitator it could be someone who puts their own spin on your ideas (and maybe even does it better). Either way, you need to figure out how to deal with copycats, be they illegally steal your work or become legitimate competition.

Related: How to maintain your first market position in a copycat world

1. Get Flattered First, Then Make a Legal Checklist

when you see someone copying your business, your first reaction will probably be anger: you’ve worked for years on an idea, and now someone is just stealing it? That can definitely be frustrating. But really, you should be flattered. Think about it: “Wow, does anyone think we’re successful enough to copy us? You should get a pat on the back.”

So if someone is copying you, be proud.

Once you’ve congratulated yourself, make a mental checklist to see if you’re breaking any real laws. No need to call a lawyer (yet), just check to see if any of your trademarks or copyright protected graphics and text are being used by your alleged competition. You should also see if they are committing any trade dress infringement; in other words, when the appearance of your product is close enough to yours to confuse a consumer.

In the early days of my company, Trainual, we had a competitor copy our entire website. They were so cheeky and lazy about it that their copy even used “Trainual” in a bunch of places. At this point, we got a lawyer involved, and a simple cease and desist letter took care of everything. And if you have someone copying that obviously, you should probably contact a lawyer as well.

2. Is your impersonator doing a good job?

I remember a friend coming back from a trip to New York years ago with a bunch of bootleg VHS tapes he’d bought on Canal Street, tapes someone had just recorded from their seat in the theater. They were horrible, blurry shots, people walking in front of the camera, the tapes were virtually unwatchable. It wasn’t like he was going to stop watching a movie at the theater because he had seen those pirates.

It’s the same with business: if you have a competitor who is essentially a low-quality bootleg of your business, there’s not much to worry about. Needless to say, the competitor who copied our entire website is no more – when a copycat tries to sell such a bad knockoff, it’s nothing to worry about.

But sometimes there may be cause for concern. What if your impersonator is doing a good job? Or, even worse, a better job than yours? Now you have legitimate competition. Think: How are you going to compete against them in the future?

Related: Want to turn strong competition to your advantage? Copy the best features of your competitors.

3. Differentiate yourself with a strategy

Jeff Bezos once said, “If we can keep our competitors focused on us while we focus on the customer, we’ll ultimately come out right.” That is, if you spend all your time worrying about your impersonator contest, your business will become a series of knee-jerk, anxious reactions, and you’ll end up building the same products or producing the same services as everyone else. Instead, focus on your customer and what they want. By doing so, you will set yourself apart from the people who matter most to you.

Take Southwest Airlines for example. When they were just starting out, they had to find a way to break into a fairly competitive airline industry. So their goal was to become a low-cost airline, and they were looking for customers who wanted to get from one place to another as efficiently as possible.

They did this by making all the seats on all the planes the same, which meant they didn’t need to assign seats, and they could switch people from flights quite easily. (If you didn’t know, Southwest used to be the only airline that didn’t charge change fees.) This tactic works for Southwest’s low-cost airline strategy, and they now have an incredibly loyal following.

Other airlines, whose strategies rely on different types of fares and classes of service, couldn’t copy Southwest’s open-seat model, even if they found people liked it better. This is because their strategy won’t allow them to sell all seats as if they were the same, so the “efficient travel” customer will fly Southwest. Instead of focusing on what other airlines were doing, Southwest focused on what its customers wanted. And it was worth it.

build your strategy around your customers, and copycats will always be one step behind you because they won’t know what you’re doing next. Eventually, your customers will recognize you as the original, and if your imitators don’t differentiate, they won’t be around for long.