One hard truth that new entrepreneurs find out quickly is that, running a business is hard and they'll have to compete if they want to be successful.
In many ways, doing business follows the Darwinian principles of natural selection—only the fittest survive. If you don't innovate, take risks, and attract new customers, you'll go extinct. So how do you stay competitive and grow your customer base in a fierce marketplace?
4 Ways to Gain Customers in a Competitive Market
Study the Competition
Whatever your product is, if it makes money, it will likely have a competitor in the market. Instead of holding out for that one unique product, you should study rival companies and use them to refine your brand.
Analyze your competitors' products and services to see what they offer and what they do not. You can then brainstorm ways to innovate and find solutions to unsolved problems in your particular niche. Doing this allows you to offer something that no one else does.
Most Millenials and older generations can remember the hassle of driving all the way to the local Blockbuster to rent new movies. Netflix filled a gap in the video rental market by allowing customers to send and receive movies by mail, eliminating the need for in-store visits. It later innovated its service by streaming movies online and getting rid of late fees, adding further convenience to customers. Today, Netflix is one one of the largest pure media companies in the world with a valuation of $150 billion. Blockbuster, however, failed to innovate and has since gone out of business. Even if you're not a media business, Netflix's strategy serves as an excellent example of how a company can innovate and capitalize on market gaps.
Outprice Your Competitor
Offering a more affordable option is always a good way to attract new clients. However, simply being the cheapest product around doesn't automatically guarantee that people will be buying from you. A low priced item is often considered an inferior one. What you can do is study your competitor's pricing structure and decide on a price that's lower but would not raise questions about your brand's quality or value.
You can also establish a clear pricing strategy. Decide if you want to offer "every day low prices" like Amazon or Walmart. Just make sure you can consistently offer lower prices than your competition. You could also utilize a “price discrimination” strategy where you analyze how customers find your business and adjust pricing based on their spending power. Experiment until you find the best strategy.
Make Allies of Other Businesses
Building a database is challenging, but you can make things easier by aligning your company with other established businesses that serve the same demographic. You then look for a way to promote your company with their database. For instance, a new boutique can work with a popular hair salon and offer a free summer dress to the first 100 customers who'll get their hair cut or colored. But they would have to pick up the dress at the boutique.
Think of the older business as a host and your brand as the beneficiary. Making an ally of the host provides you with a large set of prospects. Meanwhile, your host will have a way to reward their most loyal clients. It's a win-win situation.
Provide Better Customer Service
One of the best ways to encourage your competitor's customers to give you a chance is to provide them with better customer service than they're used to. One study revealed that 89% of consumers would change brands if they experienced poor customer service.
Customers return to brands that make them feel appreciated, respected, and valued. You can make them feel this way through simple things like greeting them with a smile when they come to your store or sending personalized emails. Listening will also get you a lot of customers. Listen to them even when they are complaining. Never justify the mistakes made or blame or criticize your client. They will always have the right to speak out.
Winning new customers is a sweet feeling. It feels even better when they come from your competitors. Integrating these ideas with your marketing plan will give your business an advantage.