Category Archives: business competition

Take on Competitors by Claiming Your Niche

Do you know who your direct competition is? If you’re a small business purveyor of artisanal popcorn, you might think your direct competition is other popcorn providers — big or small. You might even consider only those in the same regional area as you as your direct competition. But what about other firms that provide salty snacks and movie fare? Or other local snack sellers? Your direct competition isn’t always obvious, and even when it is, it can be tough to compete. Once you’ve got all of your direct competition down, you can slowly start to create a plan to tackle and outperform your competitors.

Here are a few tips to help make this happen:

  • Provide amazing customer service. If there’s one place where small businesses have the upper hand, it’s the attention they can provide to each and every customer that walks in the door or clicks into your website. Making every customer feel like they’re your first and most important gives you the “personal touch” advantage over bigger companies and is a step in the right direction for repeat business.
  • Take advantage of technology. In today’s market, having a strong web presence is paramount, but it takes more than a website. With social media channels on Facebook and Twitter, you can tackle customer service quickly, giving you an edge against larger retailers that might not have the time and attention for each and every customer. When you do setup your website, provide e-commerce, provide a mobile website and be sure to keep dynamic, fresh content coming so that search engines will keep your website at the top. Also, spend some time figuring out how users are getting to your competitors’ websites to make sure you cover all of your SEO (Search Engine Optimization) bases.
  • Court your current customers. As a small business, you have the ability to pamper your current customers in a way that larger retailers simply don’t. Create rewards programs, special sales for repeat customers and run ambassador programs to use your current customers as brand evangelizers. Whereas large companies tend to see a faceless crowd of consumers, small businesses have the opportunity not only to acknowledge their consumers but to make them feel like royalty.
  • Know your niche and stick to it. Many companies take on more than they can handle after perfecting the art of a simple service or product. Small businesses that stick to what they know, what they’ve perfected, they have a greater chance at keeping their consumers. Everyone goes to Marco’s Taco Cart for lunch because he does tacos well, not because he offers a little bit of every cuisine. When a large retailer takes on every market, it becomes a jack of all trades and a master of none. Be the proud master of your niche, and your customers will take notice.

If you’re confident in your business and focus on personal service, you’ll have no problem taking on your direct competition. Know your niche, dive into the digital market and big retailers will have nothing on your small business!

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How to Compete with Amazon and Win

After Amazon.com announced that it will be offering same-day deliveries (albeit in limited locations) the retail world has been abuzz. Many believe (quite understandably) that the push for same-day delivery by the online mega-retailer may hurt local brick and mortar stores. But if you own a small shop and see that you are in the cross-hairs of Amazon’s strategic maneuvering, you don’t have to sound the death knell just yet. If you are open to change and can do some strategic maneuvering on your own, you may just survive the onslaught. But you need to keep the following five points in mind:

 

1. First, realize that you can’t compete on price. Amazon is a mamouth, ecommerce giant. If you try to compete directly with them, you’re wasting your time and effort. Even when Amazon adds the sales tax to the price of an item (a move that the company has famously been avoiding since it was founded), you will still have a hard time competing with the online retailer on price, and you will have a hard time convincing customers to come to your store if you are merely carrying the same products they can almost effortlessly purchase online. It doesn’t matter how much you are discounting or trying to keep your window display (and your store), fresh, beautiful, and stocked.

2. Re-evaluate your product and service offerings. Are you feeling angry, resentful, anxious and/or overwhelmed that this corporate cookie monster is taking away your customers? It’s to be expected and understood. But, you don’t necessarily have to throw up your hands and close up shop, either. Realize that just because you cannot compete on price, it doesn’t mean you can’t “compete” in other ways… and even win. But you may have to change your business model to get there. The Harvard Bookstore is a prime example of what I mean. Read this article over at Forbes, study it, and use it as a model for your own attempts at redefining your business.

3. Make sure customers can still find you online. Since the Internet has become a medium to purchase goods, it has always favored bigger businesses that have the resources to ensure that their business gets the coveted top spots on the search results page. But over the past year or so, as Google has quite publicly shaken-up the online search world, many online retailers and brick and mortars alike have cried afoul. If Amazon was dominating the searches before, now its presence seems to be even more imposing. How can a small business compete on those prime, relevant keywords when the likes of Amazon (and affiliates) are dominating (at least) half of the first search results page? The answer is, don’t!!! It’s a game you won’t be able to win. Focus instead on less popular and long-tail keywords, and look for other, non-search based traffic, such as via social media or by hosting a relevant forum. Again, it’s about creating a niche user experience. If you can create a focused community around your site you will be in a better position to bring in targeted (paying) traffic.

4. Re-vamp your loyalty programs. In my last post, I offered a rundown of some methods to breathe life (and ROI) into your loyalty programs. If you are not including social media in your loyalty program in some way then chances are pretty good that you are losing customers. Take a look at some of the platforms mentioned in the post, and figure out what will work for your business.

5. Reach out to your local community. If you go about researching ways to market your local business (especially if you want “on the cheap”), you’ll find countless articles from marketing gurus who advocate sponsoring community events and giving to local charitable causes. While this may create some good feelings about your business; it may not necessarily convert to an increase in sales. So does that mean you should scrap your plans for these events and publicized acts of kindness? No. But you have to be smarter with them. You are looking for the kinds of events that will build a community around your business. To know which events will do that, you’ll have to invest yourself in some good, old-fashioned market research.

So, if you own a small, local shop and you don’t want to lose it all to Amazon, know that with a little openness, flexibility, and effort, you can still come out winning.

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Your Competitor Lowered His Prices: Don’t Panic, Follow These Strategic Steps

As the economy continues to struggle, many small business owners are finding that they have to compete more and more for consumers’ attention and wallets. It’s no secret that price can be a huge motivator in people’s minds today as they go about making their purchase decisions. In an attempt to keep their sales levels up, many business owners have slashed prices. But are these deep discounts helping or hurting their businesses?

Should You Lower Prices?

Let’s say that your big box competitor down the street decides to offer their products at fire sales prices. Should you do the same? Before you run to lower your prices in order to match your competitor’s offer, you shoudl first consider if it’s really going to help.

1. Take Stock of Your Business

The key is to understand your place in the market before you decide to change you current pricing.  You should ask yourself the following questions:

  • Will a Price Cut Really be Effective in Bringing in More Revenue? Most businesses can categorize their clientele into segments, and each of those segments has different needs. For example, if you own a curtain company, you may have clients who want inexpensive, functional curtains or blinds, as well as those who are willing to pay for more expensive, specialty items. If you have big competitors that can afford to slash their prices, you may be tempted to do the same. But the truth is that you will only be able to lower prices in the category of less expensive products in order to attract price-conscious consumers.
  • How Are Your Profit Margins? It doesn’t do any good to sell your products at a loss, no matter what your competitors are doing. Have an in-depth understanding of your cash flow and profit margins, and if a competing business lowers prices below that, then you just have to be real with the fact that you won’t be able to compete on price. In the case of the curtain store mentioned above, your efforts could be focused on either cutting costs, or even better, finding ways to add value to your products. Which brings me to the next point…
  • Where are the places where you can add value? Not all consumers care about price alone;  many will buy according to the great customer service and value they get with their purchase. With this in mind, before you lower prices check to see how you can add value while keeping the price the same. With the curtain store, for example, you could hire customer service representatives who can help consumers match colors and plan the decor of a particular space. You could also offer to measure the windows for free, guarantee a quick delivery, or install inexpensive child-proof cord-holders. Just keep in mind, however, that you should do some research before making any offers to be sure that your customers will indeed see it as a value-added feature or service.

2. Consider the Competition

It’s also important to understand why your competitor has lowered prices in order to determine your reaction. The three most common reasons are:

  • To Take Over the Market. Many times, fledgling companies think that if they can quickly gain a large percentage of the market share, they’ll set themselves up for future growth. However, many business owners fail to plan for what will happen when they are the biggest company around, but aren’t earning an acceptable profit. A price increase at that point won’t likely go over well with consumers, and they may end up shutting their doors. Those companies that stood firm during the price wars and continued to offer great service and a valuable product reap the benefits.
  • To Create Better Purchasing Power. Manufacturers offer better prices to companies that buy more, and a business owner may decide to lower prices in an attempt to have the ability to order more product and get those prices. This can be a dangerous game, because once an owner achieves better wholesale discounts, he or she will have to maintain the volume in order to keep the discount. And to do that, sales may need to continue at an unacceptable profit margin.
  • To Grow a Market. Sometimes business owners in a new market will offer low prices in order to make that market grow more quickly. For instance, some businesses offer discounts to new customers, or on new products to introduce them to their customers. This is typically short-lived, and once consumers have been made aware of the new product, prices are adjusted upwards.

Final Thoughts

It’s important to know what your business’s price points are, how your business is perceived by the public, and what your competitor’s motives are before you decide what your response to price discounts will be. Once you take all of these factors into account, you’ll be in a better position to make your pricing decisions. Remember, your goal is to ultimately increase revenue, and if you make a poor choice, you could damage your cash flow in the long run.

Author Bio: Suzanne Kearns is a small business contributor for Money Crashers Personal Finance where she writes about business finances, marketing, entrepreneurship, and more.

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What You Should Learn When Spying on Your Competition

spying on your competitionSuccess depends on how effectively you can differentiate your products, services, and solutions from those offered by your competitors. In order to build and maintain your unique selling point among customers, you need to be aware of what your competition is doing. Although “spying” is an extreme term, focused attention and research on your competitors will help your business stay one step ahead!

1. Identify your competition. The first thing that you need to do is find out who your competitors are. If you do not know this information off-hand, then you can do a little research. Check the phone directory, do an on-line search to find out which businesses in your immediate market are offering similar products or services.

2. What marketing techniques do they use? Next, you should look at your competitors’ marketing strategy. To do this you should collect and examine your competitors’ marketing material, such as brochures, print advertisements, web pages, and articles in which they were featured. Also look into any broadcast advertising.

3. What is the selling point? After examining your competitors’ marketing strategies, you should be able to determine the different selling points that each company is promoting.

4. What is the customer experience? Another important piece of information to have about your competition is what it feels like to be their customer. You can go to a competitor as a mystery shopper, check out their websites, or call up for an estimate of services to see what the customer service is like. You can also talk to their customers to see how satisfied they are, and to find out why they choose to do business with a certain competitor

5. Where are your competitors holding? Find out if your competitors’ business is growing, maintaining, or declining. You can do this by looking at their stocks, available financial statements and reports, or credit and background profiles. This will give you vital information about market demand and how well your competition is tapping into it.

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