Dear Entrepreneur,
Competition can be intimidating but it is also healthy for businesses because it encourages innovation which increases productivity. To build a successful business, Entrepreneurs must stay vigilant of competitors and develop strategies for staying ahead of the curve. Agreed, this can sometimes be easier said than done, however there are a number of methods a business owner may use to keep ahead of the competition.
Before trying to outperform the competition, an Entrepreneur should consider carrying out what is called competitor analysis which is essentially the process of identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to your own product/service. To do this effectively you need to seek answers to the following questions:
Who Are My Key Competitors?
It is important to identify your major competition and in classifying competitors there are two major considerations:
- Direct competitors: These are businesses that offer similar products/ services and are also operating within your geographic area. A good example are the popular toothpaste brands, Macleans and Closeup.
- Substitute competitors: These are businesses that offer different products/services in your geographical area but are also competing for same customers. As an illustration, consider Domino’s and McDonald’s. One serves pizza, the other hamburgers, yet both aim to satisfy the hunger of consumers’ and can be considered substitutes.
What Do My Competitors Do Differently?
This entails acquiring data about the operations of your competitors and comparing it to how your company operates. Some important information you may want to gather include:
- Product: Buy from your competitor and evaluate the quality of the product or service
- Pricing: How do they price their products/ service? Do they have discount policies?
- Place: In comparison to your company, what is their geographic reach or service area?
- Promotion: What marketing channels do they use to communicate and engage with customers?
What Does This Information Tell Me?
From the information gathered you are able to summarize everything that would make a customer choose (or not choose) your competitor. If this exercise is properly carried out you would be able to pinpoint the strengths and weakness of you and your competitors business which would also assist you in designing strategies that will enable you outperform your competition
3 QUICK WAYS TO OUTPERFORM YOUR COMPETITION
Great Customer Service
Building customer loyalty and standing out from the competition can be done by offering excellent and memorable customer service. Make it a point to hire personnel that are fully conversant with not just your goods and services but also your brand as a whole. When employing people for the customer service role, it is more important to find the right candidates than to fill open positions.
Additionally, interact with customers to try as much as possible to retain them. It will be difficult to figure out how to beat competition If the customers constantly leave. Retaining customers that trusts the business and the brand is a way of beating competition.
Pricing
Offering more competitive pricing is among the simplest strategies for outperforming competitors. There is need for a comprehensive understanding of what the competitors’ products or services are priced at in order to choose the right price point. It is important to find out which rivals are the most affordable. The next step is for a person doing business to decide if what is being sold or offered adds more value than the competitor’s and should be priced higher as a result.
The most effective pricing strategy may not always involve price reductions. A business man must determine which of the market’s lower, middle, and top tiers of clients constitutes the target audience.
Creating A Niche
It is easier to get a lot closer to accomplishing the aim of reducing competition when a niche is created. This is so because there is far less room for growth in an overcrowded market. A unique selling scheme is necessary if a person doing business wants to stand out in a crowded market. The more unique it is, the lesser room for competition.
The foundation of an effective business is specialization. An established niche market makes it easier to reach potential customers and high client retention rate is also attained. Start employing a specialty marketing plan for customers by concentrating on social media platforms where the target customers are.
CONCLUSION
Although competition can be intimidating, it is important for business. A successful business does not get intimidated by competition but challenged by it to be better. When there is competition, a person doing business is encouraged to do better and upgrade the products and services to standout.
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