Know your competition: Learn from their mistakes
Wed 29 October 2014 - 12:14 pmEditor's blog | Featured | Hot Tips | Opinion | Small Business
Unless your business is the final petrol station before the Nullarbor Plain, you’ve got competition. And regardless of how seamless you think your product range, service offering, and customer service to be – we’re all human, and you ARE making mistakes.
It’s not a bad thing. Our mistakes can be a gateway to something better and brighter. However, rather than waiting for your own business to incur the expense and trouble that a mistake can cause, why not be a bit savvier about it? Why not skip the mistake-making part, and go straight to learning the lesson?
It’s often said that knowing your competition is the first step to creating any business. And yes, you’ll include your strategy in your business plan. But competition can change rapidly. Sometimes, even over night.
Let’s say you’re a successful coffee shop in a prime location. You’ve got many loyal customers, and your business is growing steadily year-on-year. One day, a juice bar opens up at that vacant lease just over the road. Different product, right? It’s not a problem – so you do nothing. Except six months down the track, they start doing coffee and fresh sandwiches. Another few months go by, and they’re baking their own muffins and cakes. The customers love it, and it’s already too late. While you were letting the opportunity to evolve go by, the competition was busy snatching it from under your nose.
With the statistic that one in three new small businesses fail in their first year of operation, and two out of four by the end of the second, is fear-inducing. Or at least it should be.
Preparedness is the key here, and learning from your competitor’s mistakes not only makes good business sense, it’s essential.
If that first cafe owner had only looked more closely at what was happening over at the juice bar, perhaps he would have flourished rather than failed. For example, his coffee was cheaper, and his shop was in a quieter stretch of the road. Why didn’t he market these positives? His many years in the business also told him that customers love table-service, while over the road they were only doing counter sales. Yet he didn’t act on it.
Ignoring the competition is akin to putting your head in the sand. And usually, it only goes one way.
Here are my five key tips for staying competitive:
- Who are they? Don’t fall into the trap of looking for just the businesses with the exact same products or service. Assess it on what customer need the business is fulfilling, and measure it against your own.
- Consider their company culture. Bad culture has been the undoing of countless businesses. Is the competition offering their staff something that you’re not? Fill the gap, and then some.
- How are you differentiating your products and services from the competition? You know they’re different, but do your customers?
- Track your reputation. Are you considered “better quality” but more expensive? What about cheaper, but slower service? Knowing your weaknesses in the mind of the customer can be make or break.
- Be a mystery customer. You can’t assess the customer experience if you haven’t been one yourself. Keep close tabs on what they’re doing, buy some products, compare them to your own. If you can’t do it yourself, engage an independent person to impartially do it for you.