When starting a business, one of the things that a lot of people overlook is the fact that someone is already doing the same thing. No matter how original you think your idea is, no matter how fresh, chances are that someone has had the same idea already. When you’re starting a business, it is usually a good idea to look up the field that you’re going into. What does the competition look like?
Competition drives business innovation, and as such it can definitely be a good thing. However, your business can also lose out revenue to your competition if that business appears to be a better alternative to yours. During market research for your business, when businesses who would be your competition are not doing well, it’s an indication of how well your business might also perform.
Here are some tips to use competition in your business environment to your advantage:
Find Out What Makes Your Competitors Successful
When you are a business owner, you have to understand that you can’t be passive when it comes to your competition. You can’t just say that you don’t care about what your competition is up to. The actions of other businesses that have a similar product or service as yours directly affects how well your business does. After all, you are all drawing from the same pool of customers.
You need to study your competitor’s products. You can also look into how they go about marketing on social media. How do they interact with their customers. You do all this to find what it is about their business that draws customers to it. Of course, you don’t want to copy those things. When a customer can tell that one business is an imitation of another, they will usually go for the original.
Carefully looking at all these factors will help you understand the different areas in which your own business is lacking, and come up with solutions to address those problems.
It’s All About The Customer
The most important part of any business is customers. If you sell sneakers, you should always want to know what new pair is trending. Are customers going for more affordable alternatives, or are they going for more fashionable ones? In order to properly anticipate what your customers need and provide value to them, you need a picture of the whole market.
Go on your competitor’s social media pages. What products are customers asking for. What suggestion are customers making. In short, what do they want. When you know what the customers in your market want, then you’re in a pretty comfortable position as a business.
It goes without saying, but you also want to keep tabs on what customers of your own business are up to.
You Need A Pricing Strategy That Will Beat Out The Competition
There are a lot of factors to consider when you’re setting the price for your product or service. And pricing is definitely one of the most important aspects of running a business. If you set it too high, you miss out on sales. On the other hand, when you set your prices too low, you miss out on revenue. You want to make sure that you get it right.
If you run a business, for example, selling hair on Instagram, your prices can make your or break your business. That’s because it’s a market that is highly saturated; there are a lot of people doing that same thing. Set your price too high and people will just go with the less expensive alternatives. Too low might make some customers think that your product is inferior. In this case you should be thinking less about what your business’ costs are and more about what prices other business’ are selling their hair at.
You want to set a price that is exactly the same as your competition (and then focus on a different strategy to appear the better choice). Alternatively, you can set a price slightly below your competitor’s so you’re the more affordable alternative. Then there’s also setting a price that is slightly above what your competitor’s are selling their product for (you want to make sure that customer’s believe that they’re getting more value for that price).
A good thing to keep in mind is that no business is too small or too new to be your competition.
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