How to stand out from your competitors
“Out of the 3 attributes Fast, Good and Cheap, customers should probably only expect to be able to have two out of the three!”
Competition in business is like cod liver oil – unpleasant but good for you. It stops you being complacent and forces you to up your game and constantly strive to stay ahead of your rivals.
But how do you do that effectively – and where’s the line between innovation and desperation?
Here are our thoughts on how to differentiate your business.
What makes your business different?
Whether it’s your amazingly easy-to-use products, your ethical environmental policies or the fact that you give all your customers free biscuits, you need to know why your business is different – and you need to own that difference.
Humans are nothing if not conformist and if everyone else in the market is doing something, it can feel like you should too, because – well, because everybody else is!
But you should never follow a course that isn’t right for you or your business, just because it happens to be the prevailing trend at the moment.
Not only is there more than one way to succeed, sometimes bucking the trend is the key to success. Take the radio station BBC 6 Music – its entire raison d’etre is *not* playing mainstream chart music, but offering listeners an alternative.
Serve your customers
Every business says they put their customers first, but how many businesses actually do so?
Offering good customer service will differentiate you from your competitors, full stop, because so many companies simply don’t do it.
What’s more, customers will often be prepared to pay more for good service. Quick service, in particular, can only ever be a good thing; no one has ever complained that their product arrived too quickly, or that a website loaded too fast.
Know what’s what
To serve your customers properly, you have to know them. Who are they, what’s important to them, and how can you help them? Are the people you’re serving the people you set out to serve, or has it turned out that you appeal to a different audience?
There are lots of ways to learn about your customers; market research is great for getting the big picture, while social media is a brilliant way to talk to individual customers. Ask your customers for feedback on their purchases and dealings with you – they won’t all provide it but every response tells you something.
It’s also important to know the competition – what they’re offering and how they’re marketing themselves. While you don’t want to be led by others, there may be areas in which you’re unwittingly falling short which you can easily remedy – your competitors may be offering a better guarantee than you, for example, or charging less for delivery.
Take something away
No, we don’t mean cutting back your product range. We mean thinking about whether you’re spending money on something that you think you need but which doesn’t add really add value to your customers or help your business.
An obvious example is the high number of companies who choose to do business online only nowadays, from clothing retailer ASOS to mobile phone company Giffgaff who ironically, don’t even have a phone number. Operating online only gets rid of a lot of costs, which can allow you to lower your prices.
This doesn’t mean that there are no advantages to having a retail presence, or that no clothing or mobile phone company can benefit from having a store – just that it isn’t something that those companies feel they need.
The key is never to do things in a particular way just because that’s how industry has always done them, or even how you’ve always done them. Always be open to reviewing how you operate.
For some customers, a no-frills approach can be a selling point in itself.
While some people want a mobile phone with all the latest technology, others will find this confusing and will find a simple device that only does the basics easier to use.
Budget airline Ryanair’s commitment to cutting costs seems to work in its favour even when it looks excessive (the airline once mooted the idea of charging customers to use the bathroom), as many people perceive the company as highly focused on keeping its prices down and offering good value.
Is the price right?
Price wars can be a good thing if they benefit the consumer without damaging anyone else. But most often, they make it difficult for good businesses to be viable as they try to compete with others selling the same thing for less.
There’s a maxim I always remember when I’m looking to hire a builder.
Out of the 3 attributes Fast, Good and Cheap you should probably only expect to be able to have two out of the three!
The key thing here is to remember that, most of the time businesses in any particular sector are notall selling the same thing.
Take the automotive industry, in which one manufacturer may be charging £10,000 for a hatchback and another may be charging twice that. Is the first manufacturer just offering the same product for half the price?
Almost certainly not; the second might be employing a more skilled and experienced workforce or using higher quality materials and incorporating more technology.
Which means the second manufacturer has a choice: if it doesn’t want to compete with the first by slashing its prices, it can instead market itself as offering something completely different. In fact, counter intuitive as it sounds, a higher price can in itself make a product more attractive to some people, who perceive lower priced products as automatically being of inferior quality.
Marketing consultant Jay Abraham once described himself as “the most expensive and successful marketing consultant on the planet”.
Not only did his proposition imply that he was so brilliant that people would pay whatever it took to secure his services, there can be a certain amount of kudos attached to being able to afford the best product no matter how much it costs.
Fortunately, THP Chartered Accountants aren’t the most expensive accountants on the planet – but we do pride ourselves on building strong, productive relationships with our clients and we think that’s what sets us apart from the competition.
As small business accountants based in Chelmsford, Cheam, Saffron Walden, Wanstead and the City, we offer a huge range of services – with more than 50 trained professionals working with clients across the South East.