The new digital age has raised competition in business to unparalleled levels.

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.

The good news is, it works the other way around as well.

Your competitor’s blunders can translate into an opportunity for you to snag some of their loyal customers.

The Fantastico Costco Fiasco

sam club vs costco

We all know about Costco, the massive wholesale retailer with over 81 million worldwide members. Costco 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. Plain and simple

You would think the lack of choice would drive consumers elsewhere, but people were willing to accept it in exchange for an exceptional customer experience at a great value.

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

How do you think it went?

“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.”

Oof.

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

Seeing an opportunity to shake things up, Sam’s Club (Costco’s biggest competitor) put out a little promotion of their own.

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.

But they didn’t stop there. Sam’s Club made their own take on Costco’s cutesy Visa announcement. (seen above earlier)

sam club vs costco

Shots. Fired.

Sam’s Club showed us how to steal your competitor’s customers

Attempting to capitalize on a competitors mistake is tricky. If done poorly, it can come across as overly aggressive and in poor taste.

It can even backfire on you by victimizing 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 Sam’s Club a chance to highlight that without being aggressive about it.

When coming up with a 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 the customer decide.

You’ll likely come across as the better option, and savior of their miserable customer experiences.

Costco vs Sams Club. One of the great retail battles of America goes very poorly for Costco.
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