While all small businesses are different from each other, the one thread that runs common between them all relates to dealing with competition.
Irrespective of the industry you’re in, you’re bound to feel the heat from your competitors from the early stages of running the business.
Competition can come in any form. If you run a grocery store at a particular vicinity, you could face competition from another new or well-established store down the street. Or you may encounter it from an online store.
While it can get quite intimidating for small businesses to hold their ground in the initial phase, they can very well turn it around for themselves with time. That’s because small businesses tend to be more adaptable, which is their biggest advantage.
Competition is always going to be around, and in order to be successful in the commercial world, you need to stop dreading it, and be accepting of it, welcome it without letting your competitors bully you. It is all about striking a healthy balance between respecting your rivals and beating them at their own game.
This post presents a few tips on how you can deal with competition in a fierce business environment.
- Identify Competition
It is impossible to deal with competition when you don’t know who they are and what they’re all about. So, the first thing you will need to do is identify your business rivals as these entities are going to create products and/or services that will have a direct effect on your sales.
Even though your offerings may not be exactly the same as theirs, your competitors may come up with alternatives to what you offer which may affect your market share. In order to stay in the competition and even surpass it, you will have to continually work on bettering your own product/service and maintain your hold over the market.
- Evaluate Your Competition
One you’ve identified your competitors, monitor them to figure out how they are eating into your market share. Maybe they’re using better advertising approaches, proving customers with newer features, offering their products/services at a lower price, or offering them in superior quality.
If you think evaluating your competitors will be difficult, know that it can be done through simple means as well. Simply look them up on Google, visit their website, view their advertisement on TV or read about them in newspapers or magazines. Look at their historical data and current information.
Evaluating your competitor should help you gain an insight into their best practices as well as improve your own business strategy.
- Refrain from Getting into Price Wars
Often when small businesses start to lose customers, they panic and try to get back into the game by slashing their prices. However, this strategy is wrong as this can have a number of negative consequences on your business.
Not only is cutting prices hard on your turnover, it also becomes difficult to pull them up again. While you will attract customers with price cuts, you will only be able to keep them as long as the prices are down. Once you start picking them up, they’ll switch to your competitor anyway.
When you reduce your prices, you also lower the perceived value of your brand and product. Also, your existing customers may start to wonder if you’re compromising on the quality of the product to keep up with the dropped prices.
It makes your business seem like a follower or a puppet that responds to the antic of its competitors. Avoid being led by someone else’s business plans and stick to following your own.
Of course, there will be times when cutting prices will make sense, but do not let it result from an impulsive reaction to the competitor’s strategy.
- Find Your Niche and Be Unique
So what is a small business to do to retain its market share without getting into price wars?
It is important that you realize that no business can hold on to every single customer. In fact, trying to do so may make it extremely difficult for you to do business.
You need to, therefore, work on identifying your ideal customer and strategize on winning that niche market. By doing so, you will secure your market share even when the competition is stiff.
By being unique in your offerings you’re opening up doors for yourself. Figure out what will make your business different from the others and use it as an opportunity to differentiate yourself from your competition.
Shift your sales, operational, and marketing efforts to emphasize the unique customer experience that you offer.
If your competitor happens to be a bigger brand, remember that small businesses are unique and extremely marketable with their personal attention, dexterity, passion and business values. Make these factors work to your advantage.
- Fine-Tune Your Venture
Whether it is a renewed emphasis on customer service or a low-price model, if you’re losing valuable market share to a competitor, you may have to change your current business strategy.
Plug the gaps, find the weak spots in your business model and replace them with efficient plans that address specific concerns. Work out ways to make your employees more productive which will help your company grow.
Acclimating to new rivals and challenges in the buzzing business environment can keep you at the helm of the market affairs.
- Be Ethical
Make it a point to keep the competition healthy. Do not play dirty even if your competitors do so. If they steal your customer data, avoid retaliating in the same way. If your competitor stoops low, chances are customer service isn’t their forte. Take the high road, strengthen your customer service efforts and capitalize on that to win them over.
You can either let competition destroy you or use it to push yourself to improve your product/service and enhance its appeal to your target demographic. Identifying, evaluating and acclimatizing to your competition can help you better your business model and attract more clients and customers. Figure out their strengths and weaknesses, and the impact of their business over yours as that should help you anticipate their strategy. Most importantly, do your best to operate at the optimal level to give only the best to your customers and employees. Doing so will augur well for you.
Mark Feldman is the chief technology officer at Findmyshift that helps customers easily schedule employee shifts using their web based application through which sharing employee schedules online with your employees becomes seamless.