Distinguish Your Business From Your Competition
Q: I'm considering opening a gift shop and calling it "The Gift Box." Although the market for gifts in my area is very strong, I'm concerned about competition from other, already existing gift shops. How can I be successful entering a market containing other, similar well-established businesses?
A: Crucial to the success of any small business is the ability of the business owner to distinguish that business from its competitors. In your case, not only do you have to concern yourself with direct competition from existing gift shops, but no doubt you'll also be faced with a degree of competition from other businesses that sell gift items in addition to their other products.
The best way to distinguish your business from its competition is to develop your business's "major sales advantage" (MSA). Your business's MSA is merely a statement describing what distinguishes your business from all of its competitors, but it must be compelling enough to convert prospects into customers. Your MSA must be limited to a single item; it should not consist of a laundry list of things that positively describe what your business does that's special. It isn't just a slogan or a catchy phrase (although you could use a slogan or catchy phrase to deliver the message behind your business's MSA).
An example of a well-known MSA is that of Enterprise (automobile) Leasing: "We pick you up." Enterprise was the first automobile leasing company to establish the policy of sending a driver with your rental car to wherever you were to pick you up. Then all you have to do is drop off the driver at the Enterprise Leasing location that activated the rental. This policy, which became Enterprise's MSA, differentiates the company from all of its competitors. And in this instance, not only are Enterprise's customers physically picked up, but so are their spirits, since the company has made life a little easier for them. This is one of the most successful MSAs every implemented.
In order to establish and operate a successful gift shop, you must develop and implement an MSA that compels prospects to do business with your shop. One example of an MSA that you might consider is one that describes how your gift shop is the "personal gift shop" of its customers. To personalize your service, you could not only collect customer demographic information such as names, addresses and other common information, but you could also collect and maintain records of each customer's previous purchases, for whom the gift was bought, when and the nature of the specific occasion for each gift they purchased. In this manner, your business would be functioning as each customer's "personal gift shop."
As your customers' "personal gift shop," you'd be maintaining records in your customer database that would enable you to proactively suggest specific gift items. Your business becomes a reminder to your customers that it's again time to do business with your shop. Furthermore, as your customers' "personal gift shop," you could also provide gift-wrapping, greeting cards and shipping--for their convenience.
Over time, your business's MSA must be completely integrated into all your business's conversion marketing efforts and become the central focus of its advertising, as well as uniquely and permanently identified with your business. Every one of your marketing and operational efforts must contain language and actions that relate back to this central theme. In fact, one way to communicate the "personal" nature of your gift shop might be to add a tag line to your business's name: "The Gift Box.Your Personal Gift Shop." Over time, it's this continuity of message that your MSA delivers that will be the best way to convert prospects into customers, and customers into life-long members of your business's customer database.
David Meier received an MBA in Finance from Loyola of Baltimore, and spent much of the 1970s teaching business courses; later, he created a consulting group, and for the next two decades, provided accounting and tax services to small-business owners. He is currently the founder and COO of Small Business 411, which provides small-business owners with ongoing business coaching and the knowledge and support required to enable them to become truly successful entrepreneurs. Visit the Small Business 411 site at http://www.smallbusiness411.com
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.