The adage that you should keep your friends close and your enemies even closer is a befitting one when it comes to the online business sphere. A real fact about the scale of competition amongst online businesses is that it is cut throat and the winner takes all.
Many budding entrepreneurs have shied away from venturing into certain markets because these markets are saturated. Their established counterparts, on the other hand, are openly battling steep competition trying to figure out how to get ahead and stay ahead of the pack.
However, saturation can mean strength. Instead of dreading the presence of too many players in the market, you can consider it as an indicator for customer demand and a viable market. With this in mind, you can find a niche in your preferred market for your business.
Having established that the competition should not be a deterrent for starting or thriving in any online business, the question remains how you can stay ahead of the competition?
- Don’t compete on price
For most small businesses eager to attract customers, the common approach to competing in their industry is usually trying to undercut the competition on price.
Although cutting prices is a quick fix in getting customers quickly it may not be sustainable as it affects your profit margins. Keep in mind that in a saturated market, there will always be a player willing to absorb lower prices than you. Should your profit margins be too low, you might soon be out of business.
The key is to reposition oneself so that instead of competing on price you compete on service. Providing impeccable service will keep your customers coming back. For example, exploring new ways of drawing customers in, like offering free consultations, can generate immense customer traffic and sales for your enterprise.
Competing by offering great customer service as opposed to ridiculously low prices helps you to survive in the industry for the right reasons and is more sustainable.
- Identify a void in your industry and fill it
Scrutinize your target industry, identify an existing void that needs to be filled then figure out the best possible way your business can service that need. Starbucks is an exceptional example. They were not the first to sell coffee. However, they re-invented the coffee shop by the sale of a caffeine fix experience.
Segment your market to understand the buying persona of your varied customers better. This will not only help your online enterprise to personalize services, but it will also provide insight as to what additional or new services you could introduce to certain segments of your market.
- Know your numbers
It surprising that most business owners do not keep tabs on the critical numbers that can make or break a business. Below are the fundamental basics that every business should be tracking;
- Average customer value (ACV)- this is simply how much money the average customer spends with you over a period. ACV will help you justify which segment has the most value and needs more attention like the allocation of more marketing resources.
- Cost per acquisition (CPA)- this is your cost every time you acquire a new client.
- Return On Investment (ROI) – this is the yardstick that shows the efficacy of marketing campaigns.
- Break Even – the volume of sales you need to make to cover the cost of making sales
Every enterprise has different numbers. Identifying them for your business and keeping track of them judiciously provides crucial data that is invaluable in helping you stay ahead of the competition in the long haul.
Business is often compared to sports in many respects. Like football, it is a game of inches, where the smallest advancement can mean an advantage on your opponents. The above
— BANC BUSINESS ANGELS (@BANCBA) 28 de junio de 2017