Sherry and Margaret are two good looking women of a similar age who get mistaken for each other frequently. They have similar builds, similar hair styles, and similar smiles. Although unrelated, they’re often taken for sisters when they’re together.
It’s not that they’re trying to look alike, it’s just that sometimes people get confused about who they are. As someone who grew up being confused for his brother, I know this can be frustrating.
But what happens in business when our customers can’t tell us apart from our competition?
In business, sometimes we get competitors that try to look like us. They see our success and feel they can copy it. They might carry similar products or offer similar services. They might try to cater to our customers and try to take our business for their own.
Many small businesses face stiff competition on a daily basis.
There are the huge box stores trying to drive up their sales with customers from our little niche market. There are the mid-size businesses that might seek to put us out of business by trying to occupy our market space. There are those people in our own industries who have decided they have the recipe for success and want to replicate it with franchises or multiple businesses, and dominate the marketplace. Perhaps it’s an online startup that wants to offer the same products and services as us at ridiculously low prices.
There’s never been a time in history when small businesses have faced competitive threats as great as the ones we face now. Across North America, malls are emptying, downtowns are struggling and small businesses are only marginally surviving.
As the owner of a small business, how do you survive and even thrive in the face of such competition? Weekly, I hear from small business owners who struggle with these threats.
Obviously, you can’t look just like your competition or you’re going to have problems.
In order to survive and even thrive in the face of all this competition, we need to clearly understand what’s going on in the marketplace and come up with a strategy that will differentiate us from our competition. In business, we usually start with a SWOT analysis: we look at the strengths, weaknesses, opportunities and threats that face us and our industry.
Strengths: We need to figure out what we’re great at. What do we do better than our competition? What do we have that gives us an advantage? Is it our people, our strategies, our location or our ability to change? Why do our best customers choose to buy from us?
We always want to build from our strengths. However, if we’re just a me-too business and we don’t have an advantage, we had better start looking at what we could do that would set us apart.
Weaknesses: What does our competition do better than us? Why are we losing customers? What’s preventing us from really reaching our full potential? Is it our team, our finances, our strategies? What are we missing?
Identifying our weaknesses allows us to understand where we need to change or strengthen so we can compete better.
Opportunities: What opportunities do we have right now that would change our business and give us an advantage over our competition? What service do we see in the marketplace that we could perform that no one else is doing? How can we grow the business or pivot the business to take advantage of these opportunities?
Many entrepreneurs can see so many opportunities that it makes their heads spin. The challenge is to focus on one or two of the best opportunities and investigate them to see if we can satisfy the necessary requirements.
Threats: What are the threats facing our business and industry? Perhaps it’s the low-cost competitor or changes in the regulatory environment. Maybe it’s the threat of the loss of some key people.
What do we need to be aware of that could possibly set our business back?
Small businesses need to continuously look for ways to be different from the competition. The things we can do that will get our customers coming back to our business every time they purchase our products or services.
We need to offer exceptional value in our marketplace so we can own the space.
We need to be able to develop and nurture relationships with our customers in a technological world that’s starved for real face time.
Sherry and Margaret don’t need to compete with each other because they have both developed and nurtured relationships that have created value for their stakeholders – their husbands, families and employers. Their ‘customers’ always come back to them as the unique individuals they are, not as look alikes.
As small business owners, what are you doing that creates so much value for your customers that no matter what happens, they will always be loyal to you?