A few months ago, we at Monarch Money experienced a fortuitous moment that most founders could only imagine: Our biggest competitor, Mint, would be shutting down.
When your competitor shuts down, it presents an enormous opportunity for your business to gain more customers and a larger market share, but only if you move quickly and thoughtfully. If you are slow to act, underestimate your competition or stay complacent, you may only see a small spike in new users or none at all.
You may also have to navigate concerns around the viability of your product category. It’s important to identify and communicate what makes your product different. Make sure people understand that this is a one-time blip, not an indicator of the sustainability of a broader space.
5 Actions to Take When Your Competitor Shuts Down
- Be where your users are.
- Streamline onboarding.
- Be transparent and own up to your mistakes.
- Identify potential bottlenecks.
- Let your community lead.
When the news broke, we expected to see a momentary spike in new customers, but a few months later, our daily signup volume has continued to increase. It can be a hectic time when your competitor shuts down, but here are some actions you can take to be ready to capitalize.
5 Steps to Capitalize When Your Competitor Shuts Down
1. Be Where Your Users Are
It’s important to move quickly when your competitor shuts down. One of the best ways to do that is to know where your primary audience is and keep your ear to the ground about the conversations in those channels. For some businesses that might be through social media, for others it could be from email or one-on-one relationships.
Reddit has been one of our most successful growth channels, and we always liked to keep tabs on different communities. So, when Intuit started quietly emailing loyal users in small batches saying that Mint was shutting down after years of use and those users shared that update on Reddit, we were among the first to know. By being part of the Reddit community, we had the first mover advantage.
As the public caught on to what was happening, we decided to share our perspective publicly and quickly — in Reddit comments, in a blog post and with new tools and features for Mint users to use.
But it’s not just about being in the right place, it’s also about having the right message. Effective customer communication needs to be open, direct, specific, authoritative and human. People want to understand not only what your product does but what you stand for. What is the mission of your company and what problem are you solving?
Lean into the aspects of your company that make you an authority on this topic. What makes you unique and why should people care? What is it about you and your company that enables people to connect with you on a human level? Addressing those issues in your communication will help you draw attention from people looking for a new product.
2. Streamline Onboarding
As we thought about what Mint users were experiencing, we realized one key area of stress was their existing Mint data, which they wouldn’t want to lose. The initial assumption was that their anxiety would be around finding a new product. While that was true, there was more anxiety around losing their existing data since that wouldn’t be recoverable.
For many brands, customers may have been using the product for years, investing time to personalize it and incorporate it into their own systems or day-to-day. Switching to a new product can be an overwhelming experience. The key to capturing these formerly loyal customers is to make the transition as easy as possible.
We decided to address that concern with a Chrome extension that let folks export their Mint data. We made it open-source so others could help fix bugs and offered it for free, even to users who weren’t planning on using our product. There were initial issues, and while not everyone forgave us, most of the feedback was positive.
Regardless of your audience or industry, people want to be heard and validated. Remember that while your competitor going bust is exciting for you, it can cause stress or concern for others. Consider how you can show that you empathize with them and want them to have a good experience. Perhaps there are new features, tools or resources you can introduce to help with transitions.
Ultimately, you stand a much better chance of resonating with prospective customers if you can understand what they are feeling.
3. Be Transparent About Your Mistakes
Scaling up for an influx of new customers can be challenging. You might go from 100 new customers a month to 1,000. This can create additional strain on your product or team.
As we onboarded more users, cracks started to show in the product and the company. We didn’t get it all right, and in fact, we admittedly fell short in many key areas. Our customer support team became overwhelmed with support requests, and it took us time to hire, onboard and train new team members. Our customer response time went from less than 24 hours to weeks. Our technical infrastructure became strained, and edge-case bugs that were rare became much more frequent.
But one thing we did all along was stay connected with our users via emails, blog posts and Reddit. We would apologize for the backlog of customer support tickets and proactively ask for input on our product roadmap. We found that simply apologizing when we fell short of user expectations, and giving people transparency into what we were doing, went a long way. Being transparent allows customers to put themselves in our shoes throughout the process.
4. Identify Potential Bottlenecks
It’s also important to think more proactively about potential bottlenecks, understand the key drivers of those bottlenecks and address them before they become bigger issues.
For example, while we were getting many more users, they were also importing a lot more history on average than before Mint’s shutdown. This meant more pressure on the parts of our infrastructure responsible for importing data, as well as customer support tickets related to it.
Think about your own tech stack and identify those bottlenecks in advance so you can avoid having to apologize in the first place.
5. Let Your Community Lead
We had to strike a balance between staying close and plugged in, but also giving our Reddit community a chance to grow more organically. Over time, we found that users would start answering each other’s product questions or giving each other tips. This in turn led to even more engagement and allowed users to genuinely express their feelings about the product, both positive and negative. As a result, we had time to digest and implement feedback without reacting to it impulsively or feeling defensive.
Community looks different depending on your business and customer base. To foster this with your own users, think about what they want to get out of community interactions and what the ideal platform would look like. Once you have that community in place, determine your criteria for when to engage and stick with it. Identify areas where your community should engage and areas where you will step in. Streamline communication channels for user feedback and be responsive. If people are giving you feedback, treat it as the gift it is. Use it to your advantage.
If (or when) your biggest competitor shuts down, remember that while not everything will be perfect, authenticity and speed go a long way in positioning your company for success.
