COMPETING THE RIGHT WAY
Small business competition is not all about price war and price cutting the supermarkets do in the UK. It is a lot more than that. The recent Tesco saga could have been avoided if excessive price war was not over stretched.
The ideal small business competition should be more of a spying exercise whereby best practices are emulated from leading firms. Please don’t get me wrong as the kind of spying am referring to here is not the one you are probably thinking about.
The content of this article are the condensed version of my years of experience working with many successful small business owners. Now sit back and enjoy and don’t forget to share this content with your network.
15 Small Business Competition Tips That Will Help Make Your Enterprise Thrive
- How to Win Customers: rather than trying to cut cost each time your customer leaves you for a competitor, why not figure out what your competition did to snatch the customer from you? I started recommending this tactics to my clients after I received a card from an insurance company that I left.
In that card, they never asked me to come back to them but they asked for feedback regarding my experience with them so that they can improve on their service.
This is what they said in the post card they sent to me “Dear Mr Chinweike…..we are not asking you to come back to us though we will appreciate if you decide to come back. We need to ensure that no other customer will have to go through what you went through that led to you leaving us,…..we need your help to make this happen, please tell us what we did wrong”
We tried this with a sample of customers that recently stopped patronising a local printing press that I worked with. We sent a similarly crafted post card to 22 customers that no longer do their printing work with my client.
The result is that not only did we get constructive feedback, we also ended up bringing back 7 customer. In fact, they voluntarily gave out insight of what it was that made them switch service provider. There is no harm in trying this small business competition trick.
- Process Improvement: through activities like small business benchmarking process, a lot can be learnt from your competition by performing process benchmarking. Though one of the major downsides of benchmarking is that it assumes that there is only one way of doing business.
But you will be amazed by the amount of process improvements that can be achieved if the results of the benchmarking process and the feedback from the customers that left the company are implemented. Just imagine what good you can do to your processes if you have this useful information at your disposal to make decisions that will improve processes rather than cutting product prices without improving services.
- Thinking outside the Box: one thing about small business competition is that it makes people think outside the box. As entrepreneurs, you already know what it is like to think outside the box and the benefits that comes with it so seeing your small business competitor doing something novel will encourage you more.
- How to Add Value to Customers’ Experience: value chain analysis is an old management tool that small businesses can use to eliminate all non-value adding activities. Again, benchmarking is a starting point. The golden rule is that any activity that does not add value to customer experience should seriously be considered and possible overhauled. Some angry customers will mention something they like about a competitor’s goods and services. Take this as an opportunity to learn something new and implement it.
- Cost control: through reverse engineering and process benchmarking, a small business can learn best practices from its competition. At the end of the day, the reason why we bother to improve the way we run our business is to cut costs that will eventually make us more money.
- What Kind of Payment Processing Are They Using? In this mobile world that we now live in, people expect the payment system to continually evolve. Mobile banking system has gone past the era when we can only use desktop computers for our online banking or to make any electronic payment.
Keeping an eye on the payment processing system of your competition is a key step in the overall small business competition. A business will lose its competitive advantage if it does not introduce flexibility in its method of taking payment.
- Public Relations Management: there is a lot to learn from a competing company in terms of public relations management. I see a lot of small businesses trying to impress the general public by hiring expensive public relations professionals who go to the press with ‘window dressed information’ trying to convince the public that they are the best when in reality it should be processes that should speak for themselves. At the very least, customer services staff should be properly trained, not only on product knowledge but with other soft skills needed to professionally discharge their duties.
- How to Manage Inventory: I remember my days of university study when we had a course on stock management and things like buffer stock and lead-time were major topics. Nowadays, just-in-time is the major philosophy in working capital management. There are cheap systems that a small business can invest in to get the best in inventory management. To compete well, you must keep up with the latest trend in inventory management software.
- Waiting Time: excessive wait time is now a thing of the past as no customer is willing to wait long, not even on the phone lines. Business technology have removed most of the hassles that small businesses go through in the bid to compete as far as managing wait is concerned. The only problem here is that it might be too much of financial burden to the small business but, this is worth giving a second thought. The golden rule here is to spy on what your small business competitor is doing and follow suit.
- Talent Hunt: smart and successful small business owners who understand the competition game will tell you that finding and hiring the best people is the key to managing a successful small business. If your major competitor is playing this game better than you and you still cannot see the handwriting on the wall then entrepreneurship may not be the thing for you.
- Security of Personal Information and Privacy: your competition will quickly drain your customer database if you expose their personal sensitive information through security breach. Learn from the mistakes of your competition instead of allowing it to happen to you. Deploying and implementing an integrated risk management should always be a top priority in today’s business world.
- Staff Utilization: ever wondered why your competition manages to get more done with lesser staff? Maybe they know how to bring out the best in their staff. Staff utilization cannot be achieved simply by introducing a performance measure but can partly be achieved by having a well-designed small business reward scheme that will motivate your employees into doing things that are outside their comfort zone.
- Bidding Process: bidding process is no longer what it used to be in the past. The bidding agents of small businesses have upped their game in bidding process. If you have been out performed at the tendering event then you will understand the negative impact that this singular experience can have on you. Well, am here today to share this good news with you that failing in a bidding process is not the end of the world but an opportunity to learn from your competition.
- When to Invest in a new IT System: IT now have pervasive effect on the way businesses are done and any small business that does not know when to invest in Information Technology infrastructure is destined to go down the lane that have long been taken by the oil giant of the industrial age.
- Social Relationship Management: in this day and age of big data, it only takes an inexpensive smart phone to produce trillions of unstructured data. These data if not managed can damage the fortune of a business within a short time. As a result, Social business intelligence management of a company can no longer be ignored. Follow your competition on social media websites like twitter and facebook to piggyback on the things they do well. Social media relationship can be used to manage negative press. As an example, senior members of staff can provide thoughtful explanation to major problem like steps that have been taken to ensure that data breach will not negatively affect a customer.
As a small business operating in this ever volatile time we now live in, you have to keep close eyes on your competitors and what they do at all time. Small business management strategies that worked in the past will for sure lead to disaster in this day and age.
I am sure you have grabbed a lot from this article on small business competition. If you have any question that has not been answered in this post, please do leave a comment below.