The competition is getting tougher. The barriers to entry for a lot of businesses are being either eliminated or reduced by a large extent. Technological advancement is to blame for the fierce competition and disruption in every industry. How can a small business survive competition? Competition from bigger companies. Competition from existing competitors. Competition from new entrants.
It is needless to say that continuous improvement, innovation and adoption of technology is essential for sustainability. Businesses are not just competing with other similar businesses. Players from different sectors and industries are disrupting existing business models. Think Uber, AirBnB and Netflix. These are primarily tech companies disrupting existing business models.
So, how can a small business survive competition?
First and foremost, as the wise leaders and coaches often say, identify your niche. Find and define the subgroup within a larger subgroup within a larger group as your target customer group.
- It is easier to serve the best grilled sandwich within 5 miles of the city university campus compared to becoming the top rated fine dine restaurant in the entire city.
- It is easier developing a custom lead management system for the home healthcare industry compared to developing a universal lead management system to be used by all industries and businesses.
Focus on a smaller customer group with custom needs and demands. It is easier to establish your business as a leader for a very small targeted set of clients. Swim in the neighbourhood swimming pool if you may. Don’t challenge the sharks in the ocean.
Secondly, always keep a check on the repeat business that you generate from your customers. Measure the LTV (life time value) for your customers, average number of orders per customer, percentage of sales generated from existing customers. The cost of acquiring a new customer is always higher. You can spend more on advertising if you can maximise the life time value.
There is no shortcut to customer loyalty and retention. Excellence is the answer.
Excellence is very subjective and vague. Customer expectations for quality product and service varies based on the value and perception. As a business, position yourself in the top tier for your target customer group and business segment. Provide more value than what the customer expects and pays for. It is thus important to formally and informally collect customer feedback. Feedback forms and surveys. Online reviews on Google and social media. One on one conversations with customers. Listen and respond to each review, feedback and complaint.
Third tip – make technology your best friend. Technology is no longer expensive and complex. You can easily find open source and budget options for all business tools such as CRM, lead management system, email marketing, live chat, social media content management etc. Follow relevant blogs and influencers on various platforms to keep yourself updated. These tools help you automate a lot of routine tasks helping save time and resources.
These are three tips we have for small businesses to compete and stay ahead of competition. We would be adding more. Please share your views in the comments section.