When the competition rides into town, there’s a few realities you must come to grips with as a small business owner.
It’s a hard truth, but you must be prepared to lose some market share. Times may have been good on your patch, but a simple logic of retail means at least some of your customer base will try the new offering at some point.
That’s why you must be willing to improve your business and be steeled for the battle ahead. To help, we’ve come up with some fundamental tips on how to prepare and plan for the changing business landscape you now find yourself in.
Before you dig in and shape-up for the fight, take some comfort from your strengths…
- You’re a small, agile business and you’re adaptable. By that virtue alone, you already have an advantage over larger, process-driven competitors;
- You know customer service and your locals. You’ve been servicing them well for some time, so back yourself and your staff in; and
- This entire process will help you know your business better. Work to its strengths and adjust its weaknesses.
That last point is key – knowledge is power and the more you can draw on, the better placed your business will be to not only survive, but thrive.
Know your business
Sadly, this is one of the major deficiencies of many small business operators. You know what you do each day, but do you recognise why you do it?
Gaining a deeper understanding of the brand of service you provide for your customers is key to improving it. The best way to attain this knowledge is to go direct to the source – your customers. Get help preparing and conducting a survey, analyse the data and make informed adjustments you know your customer base is asking for, not what you assume they need or want.
Know your enemy
Carrying on the knowledge theme…knowing what you’re up against is critical to defeating it. Sure, the new mob has their strategy for spiriting your customers away, but it’s just a strategy and it’s can always be pulled apart. Use everything at your disposal to study their business model, marketing approach and customer service priorities. There’s plenty of professionals, AP Group amongst them, that can help you prepare a comprehensive competitive analysis. Seeking professional help will cost you time and money, but it could also be the document that keeps your doors open.
Turning to pharmacy for an example, AP Group recently visited a regional town in Victoria where a powerful national brand had recently moved in from the outskirts of town onto the main retail strip amongst established pharmacy businesses.
On the surface, the relocation looked ominous, but in fact, it had the opposite effect. Whilst unable to compete on price, the community pharmacies could offer connectedness, security and comfort for their clientele. The result was in fact a higher script volume and better front of shop sales than prior to the relocation. It’s a neat juncture into our next tip too – setting yourself apart.
Mind the price
Undercutting the competition on price is a reflex reaction for many operators when turnover starts to slide. At best, it’s a Band-Aid solution that will likely win some new business and retain some existing customers, but it’s rarely sustainable. Remember, any business you win on price can be lost on price also and that is a dangerous race to the bottom.
Find a different way to stand apart. Re-think your overall service offering, find out what the competition is missing, even better if it is something they are not willing to do, and implement it. Instead of cutting, just make sure that your pricing is ‘fair’ and, if done well, watch the sales and repeat business roll in!
– Andrew Whelan, General Manager at AP Group