How to Take Advantage of Your Competitor's Mistakes

Patrick Antinozzi

costco sams club fiasco

Competition in the new digital age is fierce.

One slip up, one miscalculation, one mistake is all it takes to send your customers out the door and into the arms of your competitors.

Fortunately, the opposite rings true as well.

Your competitor's mistakes can translate into an opportunity for you to gain some of their loyal customers.

Oh, Costco

costco sams club battle

Costco, a massive wholesale retailer with over 81 million worldwide members, has had an exclusive partnership with American Express to be their "preferred" credit card provider for the past 16 years.

If you wanted to shop at Costco with a credit card, you had to use an American Express.

Consumers accepted this lack of choice in exchange for an exceptional customer experience at a great value. Costco is famous for this.

Recently, Costco made the huge decision to switch to Visa (provided by Citi bank), forcing their customers to make the switch with them.

It didn't go well.

Many Costco members say they have not received their new Costco Visa credit card in the mail or are struggling to activate the new card. Citi has been unable to keep up with questions and complaints from customers about the change, leading to some Costco members waiting for hours to speak with Citi representatives. Ginsburg says that he eventually spoke with someone in Costco's corporate office who was unable to help beyond providing the phone number for Citi assistance that Ginsburg had already called.

- Business Insider

Yikes.

If you're going to force your customers to fit within your arbitrary requirements, you'd better make it super easy.

Naturally, Sam's Club (a direct competitor of Costco), jumped at the opportunity to make some waves in the industry.

On Saturday, Sam's Club announced that, until July 4, Costco Membership Cards could serve as free Sam's Club Cards — noting that Sam's Club accepts all major credit cards, unlike Costco. Typically, only members can shop at Sam's Club, with an annual membership costing at least $45 a year.

- Business Insider

On top of this, Sam's Club made their own take on Costco's cutesy Visa announcement. (seen above earlier)

costco sams club fight

Shots. Fired.

How Sam's Club took advantage of Costco's blunder

Pouncing on, and capitalizing from, a competitors mistake is a tricky endeavor. If done poorly, it can come across as overly aggressive and in poor taste.

It can even victimize your competitor, to the point where consumers start to feel sorry for them.

Nobody likes a bully.

Sam's Club avoided this by creating a playful parody ad while simultaneously offering consumers the opportunity to try them on for size.

They simply pointed out a feature they've always had in their experience, choice.

Costco's blunder gave them a chance to highlight that without being aggressive about it.

When coming up with a poaching strategy for your own business, think less "See? This is why our competitor is terrible." and more "Here's what makes us great. Give us a try and see for yourself."

Then let them decide.

I think it's safe to say that Sam's Club was able to win over more than a few of Costco's customers with this winning strategy.

About the Author

Patrick Antinozzi

Patrick is our Content Specialist / Brand Ambassador / Internet Geek. He's got his finger on the pulse of business and retail trends, and loves writing in various corners of the internet. When he's not doing that, you'll find him traveling the world, playing hockey, or ranting about the Montreal Canadiens.

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