For every success you have in growing your market share, another business or other businesses will inevitably lose ground.
Business can be brutal because… well, that’s business!
Here are 9 quick and easy business tips to gain a competitive advantage over your rivals and insulate yourself from the threat of new entrants in the market.
1. Don’t sell products, provide solutions
Like it or not, folks out there aren’t searching for your brand, they’re just looking to solve a problem or find a particular type of product (unless you run Starbucks or Adidas!) Don’t list all the benefits your product brings. Focus on the solutions. Explain to the customer in simple, straightforward terms how or why your product can help them or assist in the attainment of their goals. Consider FedEx’s iconic slogan: When it absolutely, positively has to be there overnight. This was a clear example of addressing widely-spread anxiety about the reliability of delivery services. Run through some market research to profile your target customer. How does your product or service – and your delivery and and price point – solve other people’s problems and make their lives easier or more pleasurable?
2. Always optimize your pricing Dropping prices doesn’t necessarily raise sales, for instance (though it will definitely squeeze margins). If you position yourself as a premium brand, then your customers aren’t necessarily value-driven in the first place, and cutting prices could even tarnish your brand. Consider this case study from Robert Cialdini’s seminal book ‘Influence: The Psychology of Persuasion’: a jeweller sold out of turquoise jewelry after accidentally doubling, instead of halving, the price. The inflated price tag lent the product an unwarranted cachet! If you are a premium brand, there are ways to optimize your pricing without lowering prices. For example, offer the quality-conscious customer an ‘exclusive’ benefit that your rivals do not or cannot provide. If you are at the value-driven end of the market, on the other hand, don’t assume slashing prices means incurring a loss. Low pricing can help you rapidly onboard a heap of new customers who may also buy other items in your shop and return again. Context also counts for a lot with pricing. The best way to sell a $5,000 watch, for instance, could be by putting it next to a $10,000 watch. Think strategically when it comes to deciding any price point.
3. Hire friendly customer-facing staff
Yes, it sounds obvious, but it’s so very important! Whether consciously or not, people are more likely to buy a product if they like the sales assistant who’s attending to them. While the employee’s personality obviously has no bearing on the price or your product’s ability to serve their needs is irrelevant. Friendly customer-facing staff will always attract more sales. Be rigorous in hiring people who are genuinely cheerful, friendly and outgoing. Make sure your training program teaches them to adopt a consistently friendly approach that puts customers at ease and feel like a priority.
4. Stay open even longer
Say you’re a bricks-and-mortar store and you’re getting a rush of customers as closing time approaches… why not close up an hour later? While this may cause disgruntlement among staff, solve this issue by getting creative with rosters. Monitor customer footfall throughout the day and week to identify your busiest periods, and staff people accordingly. You can also reduce headcount during quieter periods to offset the higher costs and longer working hours created by your extended opening hours. It’s a win-win!
5. Give something for nothing (or very little)
Why not give your happy customers a voucher with their purchase to redeem on your products and services? If they love what you do already, they’re only going to love you more for this.
It’s good for you because:
It guarantees they will return to your store again. People hate to waste freebies!
When they return to your store to redeem their voucher, they may buy other items, too. If your business operates online, then the freebie could be strategically timed to coincide with a special sale.
Oh, and guess what? Chances are customers who have received vouchers or freebies won’t stay quiet about it either, so you could enjoy some positive buzz on social media.
6. Support your local community
Local businesses can arguably connect with their unique communities with much greater authority than any global chain.
A local retailer, hair salon or gardening company can sponsor a kid’s sports team and offer deep discounts for OAPs at the same time.
Some cinemas feature special ‘sensory’ screenings where parents can bring kids with autism (who would normally be overwhelmed by busy, noisy environments) to enjoy a movie in a relaxed, stress-free atmosphere. This reflects well on them and also guarantees them a loyal customer niche.
Whatever you choose to do to support your community, make sure it authentically fits with your brand offering and business journey to date.
7. Use social media smartly
Social media is a great medium through which to build a solid relationship with customers – just don’t forget what ‘social’ actually means! Soul-less corporate shop-talk won’t work on Twitter.
Try to give your brand some ‘personality’ when you write updates or posts. This can bring its own risks, of course. But if you get it right, the benefits can be immense.
Develop a tone of voice that aligns well with your brand identity. Seek to inform, help, entertain or amuse.
And most importantly – given the dire PR consequences – don’t patronize, try too hard to be funny, or tweet after a few alcoholic drinks!
8. Own your niche
Sometimes it’s better to be a master of one discipline than a jack of all trades. Admittedly, multiple revenue streams do spread your risk: if one falters, others can take up the slack.
Nevertheless, consumers often associate ‘specialists’ with higher quality products or services than generalists. And with good reason, too: specialists typically invest all their resources into perfecting a single product or service.
So what should you specialize in? To state the obvious, it should be something in which you excel.
You could also pick something with rising or recession-proof demand which is resilient to technological change in which you possess a competitive advantage over your rivals or where there’s an obvious gap in your local market.
Own it, whatever you do.
9. Be humble
Don’t ever get too satisfied with your business. You can always improve – and improve you must!
Don’t get me wrong: without the odd moment of smug satisfaction, what’s the point? Do relish in the successful launch of a game-changing product or take pleasure in positive customer feedback. But don’t let your customers hear you banging on about it time after time!
Be alert to the common element that has led to the downfall of countless hitherto thriving brands: complacency. Imaginative, nimble and innovative start-ups often do better than big market leaders that just got lazy.
You may be the disruptive innovator today, but tomorrow you could be the complacent market leader with a tired business model.
So try to be humble and always strive to improve. Seek inspiration from other entrepreneurs, from books and from seminars. The moment you think ‘mission accomplished’ is the same moment you become vulnerable to being usurped.