As part of my Business Strategy Programs for nhb.business, we carefully review the competition in your business.
And this is not a bad thing.
Competition is healthy. All of us appreciate a competitive rate or better service when we are the consumer, so we need to consider the same as service or product providers.
So it’s important to know what’s on offer in your industry. The norm needs to be reviewed and considered, when viewing your packages, services and cost.
No, you are not going to copy what the competition are doing. You are going to keep up to date, be aware, and use that as a guide for your business.
Cost is the most obvious and probably one of the most important considerations. If your competition is half your cost, you have to consider why. Are their service or product offerings inferior to yours? Are the packages structured differently? Be prepared to have the info available for when you get challenged on your higher costs. You can charge more, but then know why you do and stand by it.
Some stores aim to be the cheapest. That’s their business model. And some are the most expensive, they aim for a more exclusive clientele. But they can back it up with better quality, more convenient store locations, better customer experience. You can charge more. But be prepared to have a reason why yours is more. It does go back to your business Vision and goal. And when in doubt, refer back to that.
You may also find it impossible to sell a product for what they are offering it at. Then it’s a sign to get an accountant to review your product costing. Perhaps you’re missing something or overpaying for something. If your competitor is selling a product at a cost you can’t match, find out why.
Packages. Keep an eye on how your competition are offering their services. Perhaps their offerings are easier to understand than yours. No, don’t copy theirs, but see if you can improve on yours. Especially in difficult to understand services (like accounting! Where there are so many different items). See if you can come up with a few base model packages. They are easier to understand.
Benchmark pricing. I discussed cost above, and where you want to value your product or service. But there is no benefit to pricing yourself far below the norm. If there is a standard pricing and you want to be the cheapest, then drop it a little. Coming in at half the norm, will give you an appearance of lower quality but also drags the industry level down with others trying to compete. Pricing a little less is competitive, pricing at half is not a great idea!
Consider your niche. By seeing what your competitors are doing and if they have a specific sector model packages perfectly, maybe leave that to them. If they are known as that sector’s go-to, consider not focusing on that market. See which market is neglected or not catered for and start a niche market for them. Having a niche market helps your brand to be talked about and recommended. Yes, it’s scary focusing on one segment, rather than everyone. But catering for everyone, doesn’t help you stand out.
What’s happening online? If your competition are enjoying success and they are posting weekly competitions, daily live videos, regular blogs…. and you’re not, well then dont be surprised they are enjoying more engagement and discussions. Again, don’t copy what they are doing, but if they are setting an industry norm and you’re not, there’s a real risk of being left behind. Think about what would be unique to your business and start. Today.
Don’t hate the competition, collaboration can be fun! Sometimes the competition is just another business owner working their butts off! Get in touch, they are not all the enemy (but be sure before you go into any colabs!) it may be great if you both focus on different niche markets to recommend each other.
It might be that you admire what your competition is doing and looking to learn from their success, just remember to learn from, and be inspired by, not imitate.
You ultimately want your own success built on being uniquely you. Authenticity is key.
Keep an eye on the competition so you know what is new in your industry and consider what you can do that’s different and unique. Keep it fair and friendly ?