Whenever you’re trying to attract new customers, you have to give them a really good reason to choose your business over your competitors. But be prepared; you'll be fighting against ingrained customer habits, brand recognition, familiarity, loyalty and inertia.
You need to know what your competitors are offering customers – and make a better offer. Thorough competitor analysis is the strategic way of developing a clearer picture of what's happening in the market, and giving you a basis to develop your own action plan. As part of your research, look at the below factors:
Could you simply lower your prices to undercut your competitor? You’ll probably manage to steal a few of their customers and boost your sales in the short term. However, you need to think about this carefully: what would you do if your competitor simply undercut you in return? Could you survive vanishing profit margins in a race to the bottom? Would you be destroying the perceived value of your product or service by making it too cheap? Think about all of the consequences of slashing your prices.
Having said that, don't get too bogged down with the pricing. Look at supermarkets; although they compete fiercely on price, most customers don’t have time to traipse around the shops checking the cost of each product. Instead, shoppers often go for what’s the easiest and most convenient. However, the recession has made the public much more aware of getting value for money, so you need to strike a balance between getting the price right and giving customers what they like.
If you’re in a crowded marketplace, you need to shout more loudly than your competitors. Are you emphasizing the advantages of your own products or services? Are you giving customers enough differentiation between your offer and your competitors'? Are you making the most of social media, mailshots, broadcast and print advertising? Look at what others in the market are doing, and start building on your marketing strategy to get a slice of the action.
If you’re struggling to get people through the door, make sure you’re projecting the right image. Does your store front, website or branding need a revamp? Is your packaging too fussy or too bland? Does your brand match your products? Does your corporate look convey the right expectations, like good value, quality, trustworthiness, professionalism, reliability? Customers often judge on image, so pay attention to the messages you convey through your brand.
Can you offer more products? How about offering different sizes or more options than your competitor? Could you develop other products or services that have a strong appeal to your potential customers? By offering variety, you could attract customers looking for something that's not already on the market.
Can you make your product better that your competitors’? Could you make it longer-lasting, easier to use, safer, more efficient, better designed, smaller, bigger, more modern, more retro, or more eco-friendly? Could you improve the quality within acceptable profit margins? If your potential customers would value any of these things, make the changes. If you think your product is already better, make sure people know it – highlight it in your marketing and PR. Even if you believe you've got a superior product in practically every sense, understand that it may take a while for your message to settle with your target market.
Could you throw in free home delivery, a longer warranty, a no-quibble returns policy, a free gift or a voucher? What about easier payment options like mobile payment? You need to give your competitors' customers a reason to switch their allegiance, and free extras are a great, visible way to make your business stand out without changing your products or prices.
7. Customer service
Customer service is so important, with many people saying they'd pay extra for it. Treating your existing customers well, dealing with enquiries and complaints efficiently, and making their experience an enjoyable one, is an excellent strategy for customer retention. It can also be surprisingly effective in attracting your competitors' customers. If you go that extra mile to make your customers feel special, they’ll tell their friends, family and even mention you on social media. When a new customer does walk through your door for the first time, make it an easy and enjoyable experience for them – and they may well choose to stay.