The Importance of a Competitive Edge in Business (How You’re Going To Regain Yours)
If you run a small business, the majority of 2020 probably hasn’t been kind to you. Although there are some companies and industries that have found ways to benefit from the COVID-19 virus, the pandemic, the subsequent lockdown and the economic and commercial slump that they have necessitated, unless your business’ name is synonymous with a certain rainforest, the chances are you’re burning right now. You’ve lost revenue… and so have your customers. You find that every sale is harder won than ever. It seems as though existing customers are that much harder to lure back to your brand, while new customers are more reticent than ever to take a leap of faith in your brand.
What’s more, as if the current set of challenges you face weren’t enough, you know that you have a legion of competitors snapping at your heels. All of them are facing the same set of adversities as you. All of them are trying to engage the same target audience. And any one of them could whisk your customers away if you allow them to. Many of the consumers in your target audiences will have lost money this year. Some will have lost their jobs to the pandemic. As such, many may find that brand loyalty is a luxury they can’t afford. If your competitors can approach them with a better value proposition, fickle customers may say goodbye to your business in a very final way.
If you expect your business to survive 2020, you can’t afford to underestimate…
The importance of a competitive edge
You have a dedicated core of loyal customers. But the moment you start to take them for granted is the moment that you can expect to lose them to one of your competitors. The business graveyard is full of companies that got complacent, took their audience for granted or failed to respond to the needs of their audience or the technological landscape of their industry. Look no further for a cautionary tale than the former entertainment leviathan Blockbuster Video which closed all but one store between 2013 and 2014. This last store in Bend, OR is all that remains of a media empire that failed to move with the times and embrace the future of digital streaming. There is a glimmer of a happy ending, however, this last store is going strong and seems to have doubled down on the things that it’s able to offer its customers that streaming services can’t, like human customer service. A clever billboard for the store states “Netflix has an algorithm, we have a callgorithm”.
Still, your business needs to learn its lessons sooner rather than later.
And at a time when customers are growing more fickle than ever due to economic necessity, you can’t presume their loyalty. Nor can you take your eye off what your competitors are doing. Competitive analysis is a key part of the SWOT analysis that most entrepreneurs carry out when starting up a new business. But over time, business owners can get so subsumed with the daily operational aspects of running their business that they don’t have time to keep an eye on the competition. An error that could prove fatal.
Ongoing competitor analysis is one of many tools in your arsenal that can help you to sharpen your competitive edge, as you identify areas in which they may be better serving the needs of your shared clientele than you are, and demonstrating ways in which you could make your brand resonate more strongly with your target audience.
2020 will prove a crucial year for businesses. Here are some ways in which you can sharpen that competitive edge and ensure that your business continues to engage customers whose loyalty is harder won than ever…
Re-engage with your customers’ needs and priorities
Before your business opened its doors, you spent a great deal of time and effort on market research, getting to know your consumers needs, their priorities and what they value the the companies that they do business with.
It doesn’t matter if you’re the best there is at what you do, if what you do isn’t attuned to the needs of your target market. And in the current climate, it’s likely that your customers’ needs, values and priorities will have changed considerably. Especially when it comes to how much they’re willing (or able) to spend.
That’s not to say that you should respond to your customers’ newfound cashflow problems by slashing your prices across the board. All that’s likely to do is cause you a few more cash flow problems of your own. You do, however, need to focus on how you’ll build more added value into every transaction. From dazzlingly efficient operations and warm, caring customer service to oo-good-to-miss bundle deals. It’s easy to see upselling as advantageous for your business, but few focus on just how advantageous it can be for the customer, delivering better value for money and increasing their chances of remaining loyal to your brand.
Leverage new and emerging technologies
Technology can give your business a leading edge. It can make your processes more efficient, make your business faster and more agile, and eliminate the common pain points for customers that occur when business infrastructures are too slow to meet their needs.
There are lots of technologies out there that could give your business a leading edge and distance you from your competitors. For instance;
- AI- Chatbots and other AI solutions can ease pressure on frontline employees, helping them to deliver better service. AI can also be used to make product recommendations and improve upselling.
- 5G and IoT- 5G and an increasing use of Internet of Things enabled devices and infrastructures could allow your business to deliver outstanding performance, even when managing a remote team. And with Oracle’s converged policy solution for 5G & 4G, you can be sure that incorporating 5G is frictionless. The less you have to adapt your operations to incorporate new technology, the better.
- Augmented and Virtual Reality- AR and VR were once regarded as the stuff of science fiction. Then they were considered a fun novelty. Now they’re helping businesses of all kinds to create consumer experiences that bring real value to the consumer. From virtual car showrooms to mobile apps that show customers how good a piece of furniture will look in their bedroom.
But let’s be clear, here. Technology is only as effective as the person (or company) leveraging it. If you invest in technology but don’t know how to use it to its fullest, you’ll find that the shiny new tech at your disposal is just a shiny new impediment to your cash flow. Yes, it’s important to keep an eye on the technologies that your competitors are using. But don’t make the mistake of spending a fortune and endangering your cash flow just to keep up with the Joneses.
Before you invest in new and emerging tech, make sure you know how you’re going to leverage it to improve your performance and better meet the needs of your customers as identified above. Otherwise, you’ll find that your new flashy toys could actually do your business more harm than good.
Give them an incentive to keep coming back
Engaging new customers has always been more expensive than bringing back your existing clientele. But in this increasingly uncertain commercial climate, the prospect of engaging new customers is riskier than ever. And while we’re certainly not saying that you should stop trying, you may find it much more cost-effective to focus on incentivizing existing customers to return to your brand. This means implementing a loyalty / rewards scheme that gives them more of what they want.
Investing in the software to create unique single-use promotional codes can enable you to do exactly that, delivering targeted offers based on customers’ prior purchases, items they’ve looked at on your ecommerce site or even shopping carts that they’ve abandoned.
Alternatively, you may want to take a page out of the Uber playbook by using your customers as micro-influencers, incentivizing them to invite their friends, family and colleagues to try your brand, with both parties earning rewards in the process. This is a great way to expand your reach without expensive marketing costs, while also giving your customers a reason to advocate for your brand.
Could influencer marketing be your value added?
Finally, speaking of marketing, influencer marketing could be the most lucrative form of marketing you invest in for 2020. While many businesses have suspended influencer marketing campaigns in 2020, those that have gone ahead have benefitted from much higher levels of engagement. Spending more time at home and starved of content, consumers are turning to their favorite influencers to keep them entertained. And there’s significant opportunity here to target new customers. Especially if your target audience is the millennial generation who value the word of their favorite influencers, even more than their own friends.
One thing’s for sure. With competitors keen to capitalize on the same opportunities, you’ll need to be more aware and proactive than ever to retain your leading edge.
Categories: Outside Contributors