Defining Your Competition

Do you know who your competition is? I hope so. By keeping an eye on them, you can glean insights and learn new ways to go toe to toe with them. Sometimes they do little things that you don’t that might give them an edge. And if you can incorporate those little things, you can take that advantage away, allowing you to compete on other things.

However, getting back to the original question, do you know who your competition is? It is a very common mistake for businesses to cast a too narrow net in defining who their competitors are. This can lead to less than optimal outcomes for your company.

So, be sure to cast a very wide net in terms of defining your competitors. You have direct competitors, who are very easy to identify. Let’s take the example of a pizza parlor. Your most direct competitors are other pizza places. They compete with you for pizza customers. However, other restaurants are also competitors. Be sure to treat them as such. Just because a taco place doesn’t sell pizza doesn’t mean they aren’t a competitor. Customers could very well choose them over you. Supermarkets are also a competitor. People could choose to buy groceries and make dinner at home instead of going out to eat. Don’t forget about this.

Casting a wider net is more complicated, because you have many more competitors to have to understand and address, but the benefits of understanding them all will benefit you greatly. It will allow you to create a better set of marketing activities to attempt to attract positive attention and ultimately drive sales.

To Deliver Or Not To Deliver

It seems like the biggest trend in small business these days is delivery. You can get almost anything delivered right to your door. Does providing delivery make sense for your company? Let’s talk this through.

First, if you are a service business, this obviously does not apply to you. Delivery is a little different than we-come-to-you service, e.g. dog grooming vans. I may address this in a different post.

For those of you who sell goods rather than services, ask yourself the following questions:

  1. Do our customers want it? First and foremost, would consumers find value in having your products delivered? If the answer is yes, then you should probably consider doing it. Would it attract new customers? What are the customer ramifications if you don’t do it? Will they leave? Or never come in the first place? You need to answer these questions first.

  2. Can we afford to do it? Delivery is not cheap. You have to pay someone to do it or have an employee step away from other duties to do it. You have to have a vehicle capable of delivering the products. You have to carry insurance on that vehicle. All of this costs $$$.

  3. Can we afford to not do it? Quite simply, if our customers expect it, you should really really really consider it. If your competitors do it, you should probably do it. By doing it, you can take away a competitor’s advantage over you.

  4. Are we okay with fewer customers in the store? A major advantage of people coming into a physical location is that they tend to browse and potentially buy more than they intended. This is great for business. If you have delivery, however, you lose this benefit. Are you okay with this?

There is the possibility of having delivery be a source of competitive advantage. Years ago I worked for an office supply retailer in a small town. Their major competitor was a big box store (that shall remain nameless) who sold office supplies. The management of our store decided to offer delivery within a predetermined geographic area. This service was very appealing, especially to business customers. The big box was not flexible enough to make the decision to offer delivery themselves. As a result, it ended up being a key strength of the small business that allowed it to compete against the big box.

In sum, the delivery craze is in full swing, and I don’t see it going away any time soon, if ever. I am not necessarily recommending that everyone join the wave. However, it needs to be considered, with a full weighing of both the pros and cons.

The Little Things

We hear all the time that it’s the little things that count. In business, this is absolutely true. There are so many little things you can do that will make a big difference with customers. And what’s great is that these things are free. Retailers, below are some little things you can do. You would think these things would be obvious, but sadly sometimes they are not.

  1. Greet customers when they enter your store. Have you gone into some business and the employees failed to acknowledge your presence? I have many times, and it’s a major pet peeve. It is not hard to say ‘hello,’ ‘good morning,’ ‘welcome,’ or whatever. If you are currently busy, let them know that you’ll be right with them. Ignoring them does nothing.

  2. Smile. This one should be obvious, but maybe it’s not. Smiling at customers gives them a sense of ease and warmth. This can only help their evaluation of your business and products.

  3. Show them the way. If a customer has a question about where to find something in your store, don’t just tell them where it is. Instead, take them directly to it. This little extra effort can pay big dividends.

  4. Take an interest. Your interaction with a customer should not start with ‘how may I help you.’ You should start with ‘how are you,’ ‘nice weather we’re having,’ or something else that shows you are out for more than just the sale. It humanizes the employee-customer encounter, puts customers at ease, and helps to build relationships.

Again, these things are very simple and free to do. Hopefully you already do them, but if not, try to incorporate them into your company’s culture. It’ll work wonders.

"It's Not My Problem"

I was having a discussion with someone recently, and she said that she ran into a situation with a company. When she attempted to address the situation, an employee said, “it’s not my problem.”

I’m sure you already know what I’m about to say, but I’m going to say it anyway: “it’s not my problem” is quite possibly the worst thing you can say to a customer or potential customer. In what ways is this a terrible thing to say? Let’s examine:

  1. It indicates a lack of concern for the customer.

  2. It indicates a refusal to even discuss the matter.

  3. It is very dismissive.

  4. It opens you up to negative word of mouth via social media and personal interactions.

  5. It is quite rude.

Even if the situation is not your problem, you need to find a better way to deal with it. Regardless of fault, you should apologize that things aren’t right. Then you should help them work through the issue as best you can. This doesn’t mean admitting fault (unless it was your fault). It means to go into relationship building mode and try to create something positive out of the whole ordeal. They are going to likely leave your business unhappy, but if you can reduce the level of unhappiness, it might save the relationship.

Instead of saying “it’s not my problem,” carefully explain what happened as you see it. By explaining your side, sometimes customers will see the error of their ways and own it. Of course, sometimes they won’t. In those situations, you can either choose to end the relationship or offer some sort of olive branch, either a refund, a discount, or some sort of incentive for future patronage.

But you don’t have to always give consumers what they want. Stand your ground when you feel it is necessary. You don’t want to become known as the place that is a pushover. Create some standards and stick to them. You’ll be better off in the end.

Managing Expectations

We all have expectations for goods and services. We base our evaluations of products using those expectations. Performance exceeds expectations and we’re satisfied. Performance does not meet expectations and we’re dissatisfied. So as a business, what should we do with this information?

Well, the answer is complicated. We aim to put our best foot forward with our marketing efforts. We promote our company and products in the most positive way. Why? Because that is what attracts customers to us. But there is a problem. Based on how successful we are in painting ourselves in a positive light, consumers can come to us with super high expectations. The higher the expectations, the greater the chances that we are not going to meet them.

So do we do things to create lower expectations in consumers? Well, you can, but then you have another problem. If you don’t promote yourself so highly, consumers might not be attracted to you in the first place.

The best approach is to take a balanced approach. Don’t make claims of performance that you cannot match. Don’t promise food to a customer’s table in 10 minutes unless you can actually deliver that. Set realistic expectations for the consumers. In this example, if you know it takes around 10 minutes to get food out, add a small buffer to that and communicate it to consumers. If you tell customers it will be 10 minutes and it takes 11, they might get a little impatient. If you promise 15 minutes and it takes 11, they will be happy it was early.

Another tactic is to couple expectations with a guarantee of some sort. Promise a certain level of quality or service and back it up with a refund or some other compensation. This will help consumers manage their own expectations. If you do this, you will need to make sure you are able to meet those expectations consistently. Because if you cannot, you will be paying out frequently on the guarantee and that is not good for business.

Managing and dealing with expectations is always a challenge. Consumers are more demanding than ever. So have a plan in place to manage expectations and address the ramifications if they are not met.