Every start-up has to deal with market competition. It's a sign that an industry is viable when you see both big sharks and small ventures. But statistics show that 19% of startups fail because they get outcompeted. To be successful, businesses need to know their competitors and how to beat them in the marketplace.
Competitors can be either direct or indirect. Direct competitors target the same type of consumers and offer similar products or services. Indirect competitors offer similar products and services but their main offering may be different. To be successful, businesses must be aware of all types of competitors and learn how best to compete against each.
Beating the Market Competition
Guy Sheetrit, in an article at Business.com, suggested five simple yet powerful ways to beat your business competitors:
Identify and solve the pain points of your customers
Conduct extensive market research before launching any product or service. Ask open-ended questions on surveys to find what your target audience needs. Your product or service will start to sell when you fill the void your competitors aren't addressing but potential customers need.
Build your own niche to have more room for your business
Offer something unique and build your own niche. It cuts out the existing market competition. Prospects are easier to target in a specialized market. Craft stories around your products that speak to your prospect's lifestyle. You can use creative stories to promote your brand across social media channels and drive traffic to your website.
Get the pricing correct
Setting the price of a product is one of the most important decisions a company can make. You will need to form a hypothesis and use analytics to refine it as sales data becomes available. But never rely on data alone. Again, learn from the competition. Identify who is offering the best value for money. Be aware that there are three segments in every market - the lower, middle, and upper echelon. Identify the echelon you are targeting. Take into account input from your customers and employees. Based on your analysis of the data and competition, set a price that gives you a competitive advantage without undervaluing your offering.
Make innovation your best friend
In today's business climate, you have to be innovative to climb the ladder of success. Learn how to innovate with your products and services. Never hesitate to take a manageable risk. Innovation can make your products or services stand out from the rest. It could enhance the capabilities of what you offer in the market and make your products or services more attractive to potential buyers. Innovation can also help reduce the cost of production and maximize productivity which could provide you with a pricing advantage.
Improve your customer service
Quality customer service is about exceeding the expectations of your customers. It helps a business grow by attracting customers through favorable word-of-mouth advertising. Improved customer satisfaction also results in stronger customer loyalty. This gives a competitive advantage against other competitors as it establishes your business as the preferred option. Take a moment to think of your favorite shop or restaurant. Think about why you keep going back. A business can differentiate itself from its competitors through customer service and build loyalty that increases the lifetime value of that customer relationship.
Pulling Ahead of Your Competitors
Startups can also have great chances to pull ahead of their competitors. Lewis Howes, in his article at the Entrepreneur, cited four ways to do it:
Position your product strengths to your competitor's weaknesses
Every company has weak points. These are places where your brand can outperform. Find these points and exploit them in your marketing and collateral.
Maximize product value and cut waste. Value refers to features a customer is willing to pay for in a product or service. Drop extra features if your clients don't want or use them because they can increase cost and add complexity.
Go after large clients
Move fast and think out of the box in targeting large clients. They can give your company credibility with other potential prospects. They can often result in more business and increased revenues. A few large wins can equal many smaller wins but take considerably less overall sales effort.
Know your numbers
Metrics and critical financial numbers can either make or break a business. Identify and track them to understand how your business is performing. Never rely on your checkbook balance as an indicator that business is good or bad. A good analysis of your numbers will serve as your guide to knowing your strengths and weaknesses. The metrics will give you the means to monitor and improve your business.
You might also want to check our article on Important Metrics for Your Business.