This is one of the most common requests for support that I receive from many, many entrepreneurs suddenly come their businesses affected by competition. This is more common than you imagine and today I will tell you what to do and how to make your business sell more than your competitors.
- Don’t panic. The first thing you should be clear about when you face a situation like this is that you must remain calm. Many entrepreneurs have the tendency to react to their competitors and start to drop prices excessively or invest large amounts in advertising, which in the long run can make the problem more serious. My recommendation is that you plan a well thought out strategy in such a way that you come out the winner.
- Accept competition as natural. You must understand and accept that competition is normal. Especially if things are going great. For some reason, many come to this blog asking What are the most profitable businesses? And that’s because they want to know what is working to invest, right there! So, don’t fight against a system in which it is totally natural that there is competition and that they want to imitate what you do, especially if you are doing well.
- Don’t lower your prices lightly. Do not fall into the temptation of compete by lowering prices. This is probably the first temptation we fall into when we see someone start to “steal” our customers. However, this medicine could be worse than the disease if we don’t do it as part of a strategy. There will be an appropriate time to level your prices but you must wait to execute other actions beforehand.
- Reduce your costs. This is an important first step and must be executed immediately. In order to compete, it is important handle the best costs before the best prices. Evaluate your costs, look for better benefits with your suppliers and apply all possible actions to save in your company. This will slightly lighten the load and leave you money while you take other actions.
- Look for ideas to innovate. There are several ways to compete and one of them is to innovate. Innovate comes from the word “innovare” which has to do with learning, with improving, with producing something “new” in your business scope. Therefore, it is advisable to meet as soon as possible with your work team and brainstorm ideas to find possible alternatives. For example, if you own a car wash and offer traditional services, innovating would mean putting up a TV room for the convenience of your customers and offering them coffee and local newspapers at no additional cost while their cars are shiny.
- Improve your current products and services. Whichever is your businessAnother way to compete is by improving what you do. The Japanese use a term to define continuous improvement and it is Kaizen. It means that everything you do can be improved. If you evaluate carefully you will discover that you can make all your processes more efficient, making them faster and less expensive. Ask yourself, what can I improve today?
- Offer your clients some “Special Offers”. Customers love this phrase. All of us as consumers are attracted to the offers since they convey the idea that I will get more for less. So before sacrificing your prices, prepare a strategy where you can offer some additional benefit to those who consume more in your business. For example, if you have an inn or food sale, you could offer a free dessert on Fridays, or a courtesy drink for consumption in groups of 5 or more people. Creativity will be very important here and that you do your numbers so that your offers represent that desired benefit.
- Promote your competitive advantage. Mr. Phillip Kotler says: “If you don’t have an advantage to compete, don’t compete“And, you must make sure you have something that differentiates you from your competition and let it be an advantage over them. It may be the quality of your product, it may be the speed of your service, it may be the extraordinary way you do things. What is the best you have compared to your competition? Define what your competitive advantage is and promote. Print a large banner advertising your “delicious Texas potatoes” or your “super car polish.” And get noticed!
- Offer customer service out of this world. Customers are everything. Without costumers, there is not business. You must ensure that your collaborators offer the best possible care. If you don’t, your competition will, so you better take the initiative. Many customers do not buy for the price but for the service they provide. So your service must be exceptional and must also consider added value as part of it.
- Research your competition. Another highly recommended tip as part of your strategy is to research what your client likes about them. How to do it? Very easy. Ask a trusted friend or distant uncle to serve as your “mystery customer.” The mission will be to go to your competition’s premises as if it were a client and collect as much information as possible: how they are served, what prices they handle, presentation of the staff and the premises, speed of service and aspects in general that attract attention. This will help you know what you can do better.
As a final comment, many entrepreneurs they get too frustrated especially when the competition is “unfair“If we can call him in some way. And it is that we are hardly going to be able to escape this type of negative actions that affect our business. The advice then would be to stop looking at what they do and focus on who we are and can do better. That is called leadership. Don’t fall into the trap of neglect your customers and your business for being aware of your competitors.
Other ideas to improve your business: