As your business begins to prosper and gain momentum you may become aware of others in the market that directly or indirectly offer a similar product or service that you do.
It is important that you recognize the existence of these new competitors early on and build strategies to ensure that they do not affect your business and your market share continues to grow.
Here are 5 strategies that you can adopt to tackle the entry of new competitors:
1. Assess and Observe: When you come across competition, it is important that you observe how they function and assess where they pose a threat to your business. Ensure that you watch their marketing efforts carefully and examine what pays dividends.
Make note of their product, their services and how they interact with customers, this will allow you to determine their strengths and the weaknesses on which you can capitalize on.
2. Know Your Niche: Before combating competition, it is essential that you understand and explore the niche that your company occupies. Spend time and resources to determine who your ideal consumer is and devise a plan to expand the reach of your market.
Ensure that your consumers stay with you through exceptional customer service and that your team does their best to make sure customer needs are met and expectations are exceed. The last thing your business needs in the face of new competitors is to be complacent.
3. Avoid a Price War: When confronted with new competitors, the instinct might be to lower prices. This could be a dangerous step to take and could lead to an all-out price war. Consumer Psychology has shown us that the lower the price, the less value a consumer assigns to your product.
Secondly, the pricing of your product takes several factors into consideration; your business might not be able to survive in terms of operational costs at a lower price. Let the value of your product speak for itself rather than engaging in a price war that could drastically affect the long term prospects of your business.
4. Focus on Your Business: Putting your business and customers front and centre is the most important strategy when it comes to handling a new competitor. Build your client and consumer database so you can get a clear picture if the entry of the new competitor has indeed affected the sales of your business.
This is the time your business should focus on doing what it does best and delivering in a way only your business can. Take some time to review what makes your business stand out and ensure that that feature is the focus of any interaction – with consumers, clients, investors and vendors.
5. Explore the Prospect of Collaboration: We’ve all heard the phrase “ If you can’t beat them, join them”. In the case of new competitors, it might not be worth the time and effort on either side to engage in all out competition. If you find that your competitor can supplement the needs that your business already provides, approach them with a plan of collaboration that can benefit both businesses.
Follow these five simple strategies and you will be able to retain your customers and possibly even expand your market share when faced with new competitors.