I often heard of stories that established businesses who get overwhelmed when a competitor comes into town with a disruptive business idea that upsets their current business model. Typically, the existing business owner feels floundered about the new guys’/gal’s success and reacted feverishly about how to protect customer erosion.
How can an existing business stay proactive, so that it can remain relevant when competitors disrupt your customer base?
Here are 5 things that I think any existing business should consider in order to survive and thrive:
1) Annual examination of business model: Don’t rest on your laurels. Your leadership in the sub-category that you’ve carved out and positioned for your business needs to be strong enough to withstand competition that puts a rattle in it. Review your 7P’s (see related article on my website) to ensure these areas continue to stick with your customers. Continued innovation in important aspects of your business that are key differentiators will be important to keep your business stay alive and relevant.
2) Cultivate superior customer experience at every touch point: This means that all touch points such as phone calls, emails, social media, and customer service, among others, need to give your customers a good experience. If any one of these touch points tipped one way towards the negative, customers will catch it; they may forgive but they don’t forget the experience. Be authentic, transparent, and community-spirited to personalize customer’s experience for your brand. Because at the end of the day, it’s not about how much your product can do for them, it’s how much you care about them and take actions to show it.
3) Walk your customer’s journey and show empathy: Be aware of what’s going on in your customer’s world and challenges that they are experiencing which could impact how they manage their purse strings or wallets. Today, with high demand on expenses such as rents, insurance, health care, food items, consumers, especially the middle-class, are constantly juggling what to give in order to keep up with the high standards of living in the Bay Area. Offer flexible pricing, technology upgrades, automated processes, and even giving them a break sometimes to help them save time and money will go a long way in keeping your customers loyal to your brand.
4) Be prudent in managing your financials for success and growth: Not all business owners have a knack for numbers. But it’s essential that you understand key business ratios to keep your company in positive profit margins than constantly have to worry about cash-flows. Knowing costs of goods, costs of doing business, and ways to save money wisely for key buys, expenses, and investments will keep your financials healthy. Be sure to work with an accountant or CPA who takes a sensible approach in helping your business save and grow based on strengths of your cash flows.
5) Have a friend in the business: It’s true that no matter what profession you are in, it’s always good to have a friend whom you can trust to rely on and provide mentorship when you are down. We all know that we cannot be doing everything alone. So having a good support system, even if it’s one friend, will give you a shoulder to lean on in good or bad times.
I am sure that there are many other ways that a business owner can alleviate the challenges of feeling stifled by a new competition. But if you stay true to some of the ideas mentioned here, you will be in a better position to respond to new competition head on, with strategies that you have already planned and can be implemented quickly to elevate and differentiate your business and brand.
(c) Jenny C. Huang Marketing Consulting, February 2015
