Unless you are safe knowing that you’re the only game in town, the key to your business success and growth will lie in beating the competition.
I’m not suggesting that you try to obliterate the competition or drive them out of business. However, every time you steal one of your competitor’s clients or attract a newcomer to the scene is a step in the right direction.
I make it sound simple, but it is not.
So often, businesses try to compete against their rivals by making protracted and costly price reductions. The only winner is the one who can afford to operate at a loss (probably a massive chain) for the longest time. That doesn’t help the industry or the clients in the long run because the winner will invariably raise their prices when they arise the victor in the race to the bottom.
So how do you go about beating the competition in your industry sector without draining your capital and providing substandard services to your clients? We have 9 Top Tips to help you stay ahead of your rivals.
However, can you identify your competitors before we start with the tips? It might not be who you think it is, and you might be killing yourself to beat out a faux rival when you can pay attention to your genuine competition.
Identifying Your Competitors
Are you sure you know who they are? You can probably identify some of them, but I bet you don’t have them all covered, and you might be trying to out-do some of the wrong ones.
There are four types of competitors you need to know about, but aside from acknowledging that they could be diverting some of your potential clients, you don’t need to worry too much about two of them.
Keep your Eye on These
While you can know your enemy as well as you know yourself and not fear the outcome (paraphrasing Sun Tzu), you don’t see the ambush coming from a third party. Unless, of course, you have a lookout posted – you need to be looking out for any possible new contenders.
- Direct Competition. These are the business that you already pit yourself against daily. They sell the same products or services as you, target similar markets, they are in your area/city/region, and you know them almost as well as you know yourself. For example, you own a hair salon targeted at the student crowd from the local university, so do they.
- New entrants. Whether you are the king of the hill or already competing with multiple other businesses, these upstarts could be a surprise you never bet on. New competitors entering the market could be the fresh new thing your clients have been seeking, and you would never know about it until you start losing clients. It depends a lot on the barriers to entry in your business sector. Still, with some creativity on their part, they might find it easy to sneak their way into direct competition with you.
Be aware of these, but don’t waste too much energy on them:
You can’t spend too much energy on someone who might be in competition with you. If you start thinking like that, you will end up competing with everyone rather than focusing on your business.
- Indirect competition. These businesses can be more challenging to identify. The businesses address the same or similar client requirements as you, but they approach it differently. Your target audiences will overlap but won’t be an exact match. For example, your acupuncture business might be in indirect competition with a holistic wellness centre or weight loss clinic. You might all provide weight loss options, but you offer them in different ways.
- Substitute competitors. These businesses probably don’t even appear on your radar, but they compete for your client’s money. They don’t sell the same products or services, but their products occupy a space that could compete with yours. An example could be that you own a restaurant, but while you might be the only restaurant in the area, there are bars, cafés, take-out places, and even supermarkets that compete for your clients over the busy lunch period.
Once you’ve identified your competition, you need to make a detailed and continuous analysis of their company to determine how you compare. Competitor analysis is essential in every business, and it can help you see upcoming threats and your relative success. It will also let you know which aspects of your own business you need to improve, ultimately beating the competition.
Keep your eyes on what they are doing:
- what they offer
- how much they charge
- who their target customers are
- how they market service
- new developments appearing on the market
When you know what they are doing, you really ought to know how you stack up. While the direct comparison might show you lacking, you can flip-flop this list to your advantage.
- What do you offer – that they don’t – what can you offer?
- How much do you charge – they charge less/more – can you provide more/better?
- Who are your target clients – who are they missing – who can you target?
- How are you marketing yourself- what are the gaps in their marketing – what can you do better?
- What new developments do you have – can they compete – can you compete with their latest developments?
The key to beating the competition is knowing their game plan as well as your own. And the flexibility to use their strengths against them and change your tactics.
So get ready for the top tips for beating the competition.
9 Top Tips for Beating the Competition
If you want to beat your competitors, you need to have a plan. You already have a business plan and probably a marketing plan – but neither of those documents will lay out a definitive plan for dealing with the competition.
It would be best if you had a detailed plan for how you will deal with beating the competition
1. Know Your Business and Your People
The first thing you need to know is your business. You can’t compete with anyone if you don’t have a firm handle on your own business. You need to know every aspect to ensure you stand above your competition. Or, if you don’t, you know how to rectify the situation.
- Know your product and service inside out. You should be able to promote your business without thinking about it. Ideally, you want to be able to talk about its benefits and compare it to other comparable services and products without having to think too hard about it. The better you know and love your business offerings, the better you can share that love with new clients.
- Look after your team, and they will keep your business flourishing. It’s not just about making sure they are well paid. Company culture, inclusivity, and appreciation make up much of the employment experience. When people are happy to work somewhere, they are more content to promote your business because they are proud to work there. Conversely, unhappy staff will pass that feeling onto their friends, family, and anyone who hears them complaining about their working conditions.
- Promote your expertise because only you know how qualified you and your team members are to solve your clients’ problems. IF you don’t shout about your expertise, experience and qualification, no one else will do it for you. It’s not just about you and your teams as professionals. If your business has been nominated for a prestigious award or been voted for in a significant poll, let people know and thank those who made it possible – the clients.
Remember the adage about how someone treats their subordinates being the measure of the person? People don’t do business with people they don’t like, And a company is only as good as those it employs.
2. Know your Clients
How well do you know your clients? I’m not talking about demographics and other targeting data generalities. I’m specifically talking about what you know about your clients. If you don’t understand your clients, there is no way you’ll be able to connect with them on a genuinely engaging level.
- Understand your clients and customers. Please don’t assume you can target a demographic segment and know who they are and their motivations for making choices. So many businesses only have historical booking and purchasing data about their clients, which is not enough to understand your target audience fully.
- Let clients tell you how you can meet their needs better. You can make regular requests for feedback, and you can always make asking questions an ongoing part of your service. Perhaps you could do an annual review of your returning and even passing clientele to ask what you could do better and request suggestions.
- Recontact old customers and make sure you don’t neglect them. If you want to reengage older or lapsed clients, make sure you know who they are and try to determine why they haven’t been back for a while.
- Personalise your contact to individual people if you can. No one has the time to write every email contact to their client list, but the least you can do is address them by name. If you want to personalise further, you can segment your client list using their feedback responses, purchasing history, and answers to any intake forms you use to provide the best possible service.
- Offer new customers discounts and promotions. You want to attract new clients, so offering introductory promotions is a way to entice them into your arms. Once they are there, you can start the process of persuading them of your excellence and supremacy over the competition. But you can’t do that unless you can get them to come to you in the first place.
- Look after your existing customer before you promote introductory offers to new ones. So many companies have made the mistake of offering amazing promotional offers to new clients while existing customers are paying a higher rate. There’s nothing more guaranteed to drive clients away than feeling cheated and unappreciated. You will end up having to offer the same promotional offer eventually, but not before breaking their trust in you.
3. Pricing Techniques and Quality
Pricing is always a tough call when beating your competition out of their clients. There is no business sense in creating a reciprocal race to the bottom as you all try to undercut the rest. No one wins, and service and quality decline in the race to get more clients for less money. Competitive pricing doesn’t always mean going lower.
You can use multiple methods or ensure you cover expenses, make a profit, and still encourage clients to your door. It’s a fine balancing act and you might have to cycle through multiple pricing models to ensure the best distribution of excellent pricing.
- Promotional and loyalty pricing
- Service upsell without discounting.
- Bring a Friend
- Service upgrades and upsells
There’s so much more to beating the competition than price matching and “how low can go go”, but there is no denying that price does make a significant difference. But consider for a moment. There are many successful companies that have a policy of not discounting because their products and services have the quality and customer support that demand a fair price. And they stay successful in the face of competitor discounts and promotions.
That’s not to say they don’t use clever pricing strategies, they do, but the best ones are those you don’t see.
4. Keep Innovating
There is a continuous rolling wave of innovation in virtually every industry sector. Sometimes, there’s a lot of new trends and development, and sometimes there’s only a little, but it’s always there pushing you, your competition and your clients forward. It might be new fads and fleeting trends, but other times, a new thing comes in to sweep the board and become the next ‘big thing’.
There is no worse way to fall behind your competition than resting on your laurels and forgetting that you need to keep innovating.
- Don’t be afraid to be creative. While industries change and innovate, is there anything to stop you from being the innovator? It might sound scary, but if you have a well-established business and you can see a need for change, you could be the next innovation that sweeps the continent. With experience and constant exposure to your industry, you are in the prime position to recognise the trending needs of your clients.
- Don’t wait too long before including new trends and innovations into your business model. The chances are that if your competitors get to them first, you will be left behind. The first to keep up and succeed with new developments is always the first to spring to mind when you think of it.
William Henry Hoover didn’t invent the vacuum cleaner. He just bought the patent and had the resources to build it in 1908. However, vacuum and hoover are interchangeable names for the same domestic appliance.
5. Target New Markets
If you already have a steady and regular clientele from a particular customer segment, don’t be afraid to add to your target markets and branch out and secure a more significant proportion of the client base.
- Find a niche in the market and ensure you fill it better than your immediate competitors. You might find that the niche or market gap you can serve is a hole in your competition’s service provision. By plugging that gap in the market, you may also manage to entice some of your competitor’s clients away.
- Look after your existing market despite any expansion. It’s your loyal client base that has kept your business going so far, and they will be your baseline capital while you branch out into other markets. They could also help introduce you to new clients in your new direction. So whatever you do, don’t neglect your loyal target audience.
You might be beating the competition in your new target market, but you will fail if you don’t keep up with existing clients in the long run.
6. Differentiate Your Business From Your Competitors
This can be a little difficult if you operate an almost like-for-like service provision with your competition. It can be tricky to pinpoint where you differ – and why you are the better choice.
- Solving genuine client problems and relieving their pain points is what being in business is all about. However, do you know that you’re solving the correct issues? Have you asked your clients recently? Pain points and specific problems evolve just like everything else on Earth. The key is to keep up with that evolution and adapt to the changes required to solve the new version of an old problem.
- Provide excellent customer service, and you will never fall victim to discontentment from your clients. Even if your prices are higher, amazing client experience is the first thing to go when your business tries to undercut the competition, doing more business with less money.
- Niche attraction is not just about the segment of the population you initially attract. It’s also about including the smaller markets that fall within your target audience. For example, suppose you own a salon and target mostly women in the 25-45 age group. In that case, you will also have a significant number of ecologically and socially conscientious clients. Do you exclude them by not using cruelty-free, vegan-friendly, sustainable products, or do you add to your client base by using the inclusive products?
7. Take advantage of online ratings and review sites
Depending on your business there is probably a directory or marketplace for your industry. There’s one for practically everything these days. There is probably also an independent review and comparison site for your services too.
However, while there are multiple benefits to listing your business on these directories, they also double up as review sites and clients are free to submit their thoughts and feelings about your business. You can see ratings on Google Business too.
- Act as marketing materials for potential clients who search for your business category. If people are searching for you and your competitors to findout which one of you to use, you can be sure they end up on a comparison site. You should really hope that you stand out against your competitors. The indepenndent sites need to be updated and you need to make sure they have the right information for you.
- Enable you to see trends in client requirements. Most comparison sites ask for pros and cons, and the cons will allow you to spot any trends
- Show you what you are missing. As above, if you have a long stretch of reviews all mentioning the lack of a particular service or a gap in the customer experience, you know you have something to fix,
- Teach you what you are doing right. Similar to the gaps in your service, reviews will point out what you are doing right. and you will have to ensure that while your filling the gaps in your service you don’t inadvertently change something that you excell at.
- Allow you to respond and appreciate those who have reviewed you. Most review and comparison sites will enable and encourage you to repond to your reviewers, both positive and negative. Even if you have a 99% positive reveiw review rate, the way you respond to the remaining 1% will uave a significant effect on your potential clients.
There isn’t a chance of you beating the competition if you don’t show up on the comparison sites or if you are woefully poor in comparison. You can incentivise honest reviews from your clients – they show up on the review data – but that doesn’t make a whole lot of difference. People check the numbers as well as the ratings. So it is worth ensuring you get a lot of reviews and encourage people to leave them.
At the same time as ensuring the review and comparison sites work for you, keep a close eye on how your competition uses them. If they don’t respond to reviews or respond poorly to negative ones, you will have the edge.
It’s not all about what you know; it’s who you know too. There are few options for expansion, partnerships or attracting investors if no one knows who you are. A professional network is almost as important as your network of clients and advocates.
- Build a professional network of individuals in your industry and on the fringes. Some of these people might essentially be competitors, but they can also become allies when things are difficult. You can build a broad network that expands in multiple directions and locations, provide additional information, share tips, and help the industry through collaboration.
- Explore Partnership Opportunities within your network. As your professional circle should include those from multiple different complementary businesses, there are many opportunities for you to enter mutually beneficial partnerships that promote and enhance both companies.
- Participating in community events is the perfect way to grow your personal brand, business brand, and client base. While local attendees will probably fall into the category of ‘potential clients’, there are other relationships to pursue. Whether you participate as a sponsor, speaker, product provider or another role entirely, you can engage with business people who supply products, trainers in your speciality, financiers, investors, and much more. Meanwhile, you get to give back to the community that keeps your business going. Whether your competition does it or not, you should.
9. Marketing via Storytelling and Specialisation
Marketing is not just about how you promote your business. Excellent marketing is about understanding all aspects of your industry and how you frame your business in that environment. You will become more relevant and visible in your sector by understanding the companies, the clients, the innovation, the trends, and telling your business’ story relative to all those elements.
- Keep your website updated with new developments, trending news, new professional qualifications and new staff member appointments. Make your website a working marketing tool that keeps your clients in the loop.
- Be visible and relevant in all the same places as your competition AND your clients. I’m not saying copy your competition but be sure you are there to outshine them. Moreover, identify where your competitors aren’t and grab the clients they’re neglecting.
- Personalise and customise your marketing messaging to the right sectors of clients. No matter how specifically you target your audience, there will be deviations and differences between sub-sets of your clients. Personalise your interactions with individuals and customise your approach to the tiny nuances in your clients’ desires.
Putting it Together to Challenge your Rivals
You might have noticed that most methods of beating the competition are much more to do with you than them. Sure, you need to stay on top of what they are doing and the products and services they provide, but how you beat them depends on how you become the better option.
Your competition doesn’t mean much at all if you create the best business yours could possibly be. When you focus on your business, your service, and the contentment of your clients, you can’t help but beat the competition.