1. Take screenshots of the offending content
It may come in handy if a confrontation happens or if they delete/deny it.

2. Do a SWOT (Strength.Weakness.Opportunities.Threats) analysis of your competitor
You need to see where this person stands in your industry and compared to yourself. Is this person a legit threat?

3. Don’t write a post about the situation or link back to them
It will very tempting to do so but you must hold back unless it’s necessary to do so. Linking back may give them Google juice.

4. Don’t leave comments on the offending post
Don’t even think about doing it under a false name. If you do, that means someone is listening and may add fuel to the fire. No comments is worst than a negative comment because that means that it’s possible nobody is listening.

5. Research about them on Pipl.com
Getting to know your competition is important. It may give you ammo if needed.

6. Be honest with yourself
Does this person have a point? If you have more than a few haters, maybe they are right and you should change or adapt.

7. Spy
Subscribe to their RSS feed. Pose as a potential customer….ask questions.

8. Take it as a compliment
Some folks need to try to drag people down to help them move up. It’s an old tactic. Talk crap about the top, get mentioned by them, and get legitimized in the process. There are a lot of haters of Michael Arrington of TechCrunch and PerezHilton because they are at the top of their industry.

There will always be someone that’s smarter and hungrier than you. If not now, there will be a time. Use this as motivation to create a better product. I’ll admit that it does bother me a little but it only added fuel to the fire. If I didn’t receive any smack talk, I wouldn’t have redesigned my site last month. Now I’m in the process of developing 2 now products. Take that!