There is only one way to succeed in business – by building a loyal customer base that keeps coming back to you time after time. Although we would like to think that our business would be the first to enter a market, it most probably has already been explored by someone else. What does this mean? It means you need to find a way to compete with other businesses that has already been established.
In this post we will analyze how we can compete with other like minded people who have already established themselves in the business of your choice. Let’s explore how we can gain advantage over other businesses and become the best competitor out there.
Price Matters
This is one of the most widely applied approach practiced by most businesses. We all know that price is one of the most important things when it comes to purchasing decisions. Customers tend to favor products and services that are cheaper compared to others. Why wouldn’t they? When it comes to money we all want to save some.
We all know this, but it still is one of the most effective ways to stand out in the market. By lowering your prices you can get the customers to switch brands. This is why WalMart never fails to deliver the “Always Low Prices” Slogan. Customers love it when they can buy more for less. However, one important thing we need to realize is we still need to maintain a healthy profit margin, which is very crucial for a business to succeed.
Dare To be Different
Most start up business fail because they tend to follow the same route everybody else did. A surefire way to gain competitive advantage over your competitors is by differentiating your products and services. A business can achieve this kind of advantage by giving customers something unique which is valuable besides just offering a low price. Some of the ways you can differentiate yourself and your business is through brand name, product reliability, customer service and so on. Let’s see how else we can be different and beat our competitors in their own game.
- Your product value ( price ) should be based upon the value that it will actually provide to the customer. Why do some people buy Calvin Klein perfume and some Old Spice? It’s the value perceived by the customer in terms of what they think smells good. If I am at a Mall trying to buy a pair of Jeans, which should I buy – American Eagle or Levis? Depending on my personal preference I would go ahead and purchase American Eagle as it provides more value to me in terms of brand name and comfort.
- Make your products unique. In recent years, we have witnessed many businesses trying to stand out by making their products unique. This gives your business a huge advantage over your competitors. Here is an example – Last week my wife brought a different dish soap than what she usually does. The dish soap ( Dawn Simple Pleasure ) also had an air freshener at the bottom. As you can see this product is unique compared to other dish soaps out in the market. Obviously my wife had to try something new. Uniqueness in a product and service can be a huge, huge advantage.
Just a Slice or The Whole Pie?
I would say – just a slice. Sometimes the best way to compete is by not competing directly. If you decide to open up a gas station in a town which already has fifty Seven Eleven’s, what do you think your chances are in competing – slim to none. This is where we focus on a particular market segment where the need is most justified. How about opening up a gas station in a town where there are only couple gas stations, giving more access to town’s population? This way you will leverage the success of your business by being in the market but not competing directly with your competitors.
For example, would you be able to compete with WalMart while you start out? Most probably not. This approach is more viable for businesses that have behemoth competitors. By establishing yourself in a small segment of the market you can gain immense turnaround and loyalty from customers. And as time passes by, hopefully you will have established yourself well enough to enter the bigger market and take on the entire thing.
What about Tomorrow?
When customers buy products they not only look at the immediate value but the future value as well. How well the product or service adapts to the customer’s needs in future can dramatically increase your sales. We, as customers, want to buy things that will provide us with value in the long run. Although some products and services are meant for short term satisfaction, major purchases such as computers, cars, TV’s …. you get the idea, are usually based upon durability and how long will it be able to provide value to the customer. If money wasn’t an problem, which TV would you buy – Sony or Memorex? I bet most of you answered Sony because it is known to last longer hence, providing value to the customer today and in the future.
Before I end this post I would like to say one more thing,
Most businesses view competition as a threat and this slows the growth of most businesses. Knowing that you have a competitor gives you that extra boost to create something unique, something more valuable and a way to learn from someone else’s mistakes. Without knowing that you have someone to compete with, the desire and need to create something new and exciting would just get lost into the thin air. Competition is a good thing. So get out there and think how you can give more to your customers and help them make the right decision – by switching brand and loyalty. The only difference this time will be that the brand will be your’s and the loyalty will be towards you .
To your success,
Ritu
[image: buffalothrillsbusiness]
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