Let’s assume you own a gift store and a competing store starts slashing the price of its items by 10%, what would you do? As a serious and calculative entrepreneur, should you not worry about the tactical moves of your competition to increase its own size of the pie? Should you not be concerned that the other gift store might be making much more sales than you due to the price slash? Should you not slash yours even lower to get better patronage?
It is a curious irony to observe that many businesses that engage in frenzied efforts to capture the market share of their competitors eventually lose their own market share. And the reason is not far-fetched. Businesses are established to serve the needs of customers. The moment you take away the spotlight from your customers and focus it on your competition, you have started wrecking your titanic.
Henry Ford's popular quote said, “The competitor to be feared is the one who never bothers about you at all, but goes on making his own business better all the time.” Rather than focusing on your competition, you should instead do the following:
- Implement good management practices
Do you have a sustainable business strategy? Will it guarantee more patronage? Is your patronage driven by price only? Do your customers leave your store happier than they entered? How good are you with managing the tools (i.e. human and financial capital) at your disposal? As the best supercar is useless in the hands of a toddler, so are the best tools in the hands of a clueless entrepreneur.
- Clearly define your Unique Selling Proposition (USP)
When Taxify newly came into the Nigerian market, I had asked myself what they had to offer. They bought me over with a no cancellation fee feature. Uber initially charges 1,000 naira cancellation fee but was forced to reduce it to 400 naira when taxify came with this move. A unique selling proposition or point is what clearly sets out a business apart from its competition. It is important you nail down what makes your business unique in a world of similar competitors, or you would not be able to target your sales efforts triumphantly.
- Focus on customers
Think again about why you started the business. Was it to solve a need or was it to break the hold of the competition in your market space? The consultant budget you would have spent on trying to get 2% of your competitor’s market share could be used to solicit customer’s feedback regarding your product or service. Use this valuable feedback as a baseline to determine where you need to improve in your product or service. Periodic comparison can then be made to see if you are improving in the eyes of your customers.
- Develop your staff
Your product or service is only as good as the hands producing or delivering it. Equip your staff with the requisite training they need to perform excellently well at their jobs. Show your staff your vision for the company, don’t just tell them. Let them be a part of your dream and give them the tools they need to actualize it.
In the end, focus your energy on what you can control. For example, your customer’s perception of you and you will no longer have to worry about your competition.
- Well, do not forget your competition.
Yes, don’t forget your competition—another irony. No one said your competition can’t kill you, we only said that you can kill yourself faster than your competition. Always keep a tab on your competition especially if they are working on what you think will provide value for your customers. Make sure you are watching them for the right reasons—which will be to see what they are doing to serve their customers better.
Kindly share this article
Wednesday, 31st of July 2019
Subscribe to our Blog
Want updates? Sign up for news, exclusive events updates, official statements and all noteworthy information in the banking industry.