How to Compete in a Crowded Marketplace
Here are five tips to being the superior businesses.
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When you're competing in an extremely crowded marketplace, how do you stand out? That was the question one reader, who owns a print shop, emailed me recently. He counts at least 10 competitors in just a five-mile radius.
"Marketing in a mature industry like printing is tough, since we don't really do anything cutting edge," he told me. "Beyond platitudes of "we provide quality at a great price,' I'm at a loss when it comes to marketing."
In any competitive marketplace, the thing you must avoid at all costs is becoming a commodity -- a random, faceless provider who will suffice if the price is low enough. If there's no customer loyalty, you're always at risk of being undercut. But even in mature industries, as I describe in my book Stand Out, there are ways to differentiate your product or service.
Start by thinking of the providers that you choose to patronize as a customer. Why do you give them your business? What keeps you coming back? That may hold clues to help you determine your unique advantages.
Related: Don't Declare War. Respect Competitors, and Capitalize on Your Own Strengths.
Here are five ways you can stand out amongst your competitors.
1. Superior customer service
Every business likes to claim it provides great customer service. But think about the best customer service you've ever received. Do your employees know customers' names? Facts about their businesses and families? Do they know your customers' unique challenges or preferences?
Almost every morning, I go to a shop in Manhattan called Juice Generation for my breakfast; they know my preferred order and start making it the moment I walk in the door. It's a form of recognition and service that I appreciate it as a customer, and it keeps me coming back. Could your business learn to do the same?
2. Superior customer experience
If customer service is about executing the basics well, customer experience is about raising the bar and providing meaningful flourishes that others do not. Think about the car dealer that provides lattes and comfortable leather chairs for people waiting on an oil change, rather than the typical spartan chambers with old magazines that most offer. Can you provide amenities that make the process of visiting your business more enjoyable?
3. Superior service offerings
In a mature industry, it may seem like the options for innovation are limited. (It's not like you're going to invent a new smartphone or virtual reality device.) But if you truly listen to your customers, they may give you hints about offerings that are valuable to them. How can you take the benefits that matter to them, and expand them in a meaningful way? Every pizzeria vowed to work fast but Domino's put a 30-minute guarantee on it. Could you guarantee some element of speed, accuracy or delivery? Could you offer extra services that others are not (like delivering coffee and bagels alongside the conference reports you're printing, so your customers can concentrate on the meeting and not the logistics)?
Related: What You Need to Know About Your Competitors to Beat Them
4. Superior quality
There are easily a dozen coffee shops within a five-minute walk of my apartment, but I choose the same one every day, because I'm convinced they're the best. (Incidentally, that means that within reason – even up to a 30 percent or so premium – I'm willing to pay more for it.) How can you drive your business's reputation as being the quality provider? You could create ironclad guarantees -- no errors, or it's free. You could expand your staff training, and then advertise that as a selling point: We train our employees twice as long as our competitors, so we have the most knowledgeable staff in the entire region. You could offer your services for free to a marquee client on the condition that you can advertise that fact: We're so accurate, we're the choice of the IRS/Fort Knox/whoever absolutely must be accurate. Getting known for your quality is a powerful investment in your business's success.
5. Superior data
Finally, data can become your competitive advantage. That may sound overwhelming for entrepreneurs running smaller businesses, but big data fueled by supercomputers isn't the only game in town. Something as simple as an accurate customer database can be a powerful tool for you. Far too many businesses wish and hope that customers will come through the door, but don't take the steps to build ongoing relationships, and let them slip away anonymously. Encouraging customers to share their contact information with you -- and giving them a good reason to do so, like genuinely useful reports or e-books or coupons --gives you a powerful way to learn more about them, stay in touch with them, and service their needs better.
For entrepreneurs, competition is always fierce and sometimes it can seem that we have few options to differentiate ourselves. But using these strategies, there are often more possibilities than we may initially imagine.