Too many businesses react more to what their competitors are doing than what their customers want. Stop it. I get that you don't want to be one-upped by your competitors but just because they did something or added a service, doesn't mean it was the right thing for them to do.
Your only litmus test should be what your customers want. Do you want to know the best way to find out what they want? ASK! If you don't have a strong enough relationship that you feel as if you can't ask or wont get a good enough response, then it's time to make a change (but that's for another post).
Never stray from who you are, always keep in mind what your core essence is and always ask yourself, "Is this what my customers want, am I staying true to the essence of my brand?"
It's old hat now but I think it's worth bringing up here: New Coke. Coca-Cola first introduced New Coke in 1985 in response to Pepsi-Cola (a competitor) eating into their market share. As we all know the response to New Coke was overwhelmingly negative causing Coke to go back to their original formula, calling it Coca-Cola Classic.
With new Coke, Coca-Cola went to a sweeter formula with the idea of competing with Pepsi-Cola on sweetness. They even went against a previous marketing campaign where spokesman Bill Cosby touted the less sweeter taste as the reason for drinking Coke over Pepsi.
What happened? Coke-Cola reacted to their competitor, not to what their customers wanted and moved away from their core essence. They attempted, and ultimately failed at, reinventing themselves, when all along they were what their customers already wanted.
Staying on the subject of Coca-Cola, think of Cherry Coke and the huge hit that it was. With Cherry Coke, Coca-Cola stayed true to their essence and gave their customers what they wanted. In fact I think they waited too long, just take a look at how long Cherry Cokes have been served in restaurants and at soda fountains?
Bottom line: Stay true to who you are, ask your customers what they want and if you see something that your competitor is doing, before you do the same, ask your customer if it's okay and check it against your current identity, or essence. If your customers don't want it and you lose who you are in the process, it might be a good idea to scrap it.