Business competition can be fierce, especially in fast-moving markets where customers often shop around. Use these ten ideas to defend your market position and build your competitive advantage
1. Know the competition.
Find out who your competitors are, what they are offering, and what their strengths and weaknesses are. This will identify the areas you need to compete in, and give you a platform for differentiating yourself.
Where other businesses are doing better than you, what can you learn from them? Where the competition is weaker, what should you be doing to make the most of the opportunity?
2. Know your customers.
You are competing to attract and retain customers – so you need to understand what your customers (and potential customers) value.
Customer expectations can change dramatically. Find out what matters to your customers now - is it lower price, a premium service or the latest products?
Use what you know about your existing customers to get a better understanding of what kinds of customers find your offer most appealing. This helps you define your target market and the market segments where you are most competitive.
3. Have all your information in one place.
Dedicated CRM systems allow you to join up your sales and marketing data with other records, such as accounts, stock-keeping and delivery. That way you can know everything about a customer’s dealings with your firm - from whether their goods arrived on time to whether they are a late payer. Take a look at these CRM options for small businesses:
It's essential to give your customers good reasons to come to you rather than a rival. Develop a unique selling point (USP) that taps into what customers want. It should be clear and obvious - no-one should have to ask what makes you different.
Differentiating yourself from the competition makes it easier to promote your business. You can win customers because of what’s special about your offer, rather than competing on price.
5. Step up your marketing.
Make more effort to tell people who you are, what you sell and why they should buy from you. It doesn't have to be expensive – cost-effective promotional ideas include everything from leaflet drops to campaigns on social media.
Aim to tie everything together in a sustained marketing campaign, where you are consistently putting out the same key messages to your target customers. By doing this, you help customers get a clearer picture of what you can offer and how you are better than the competition. And you make it more likely that customers will see your marketing or remember you when they are ready to make a purchase.
6. Update your image.
Simple steps such as painting the front of your premises can make your business look more modern and inviting. Look at your business cards, social media presence, your website, branded packaging and so on. Does your image reflect your USP?
Over time, your image can easily become outdated, as customers change what they look for and competitors up their game. Do things feel fresh and exciting, or is your business becoming tired? Does your image still reflect how you want customers to think of you now?
7. Look after your existing customers.
It can be easy to take loyal customers for granted, but they will be your competitors' target market. Don’t give your customers a reason to look for alternative suppliers.
Improve customer service by being more responsive to their needs and expectations. Consider offering low-cost extras such as improved credit terms, discounts or loyalty schemes. It's cheaper and easier to keep existing customers than to find new ones.
8. Target new markets.
Selling into new markets can increase your customer base and spread your risk. Are there other potential customers similar to your existing target market? Could you reach a wider audience by selling online or overseas?
Make sure you tailor your offer to each different market segment. Don’t assume that what has worked with your existing customers is necessarily the best approach. Make sure you understand what different groups of customers really want, what the competition is currently offering them, and how you can win their business.
9. Be the best employer.
Skilled, motivated employees underpin vibrant, growing businesses. Attracting them means more than paying a competitive wage. People are often more impressed by a good working atmosphere, and benefits such as flexible working and structured career development.
Motivated employees put more effort into making sure customers are satisfied. And customers respond to dealing with people who have a positive attitude about the business they work for.
10. Look to the future.
Businesses that plan for growth are more successful than those that stand still. Keep up with developments in your sector, follow consumer trends, invest in new technology. Have a clear idea of where you want to be in one, three and five years' time.
Other businesses will be continually improving what they offer. You need to do the same if you are going to stay one step ahead of the competition.