It’s a common mistake. A young, ambitious entrepreneur will see a coffee shop open up on every corner of their city and think to themselves “I should open a coffee shop”. Hopefully, they have a seasoned adviser to ask them, “How do you plan to compete with all the other coffee shops?”. Missing the competitive landscape can be the difference between a successful endeavor and hard lesson learned.
The point of this post is to give the perspective of a seasoned adviser and point your attention to the fact that you’re probably not the only game in town. We’ve collected a bit of insight on how to assess your competition and get ahead of the game!
Find out what your customers are actually getting from you.
Every product you sell is being hired to fulfill a purpose. This applies to even the most frivolous piece of inventory on the shelf. When a customer buys a cup of coffee with an extra shot of espresso, they’re hiring that cup of coffee to wake them up. When they buy a pack of gum, they’re hiring that gum to freshen their breath, or to give their mouth something to do.
If someone is spending their money, they’re hiring. So ask what they’re hiring from you. Are they hiring your jeans to give them confidence and comfort? Are they hiring your chips to give them something to munch on while they sit in traffic? One simple way to find out is to ask them!
Some simple conversation is all you need. Beware, though - it’s best to avoid asking directly “Why are you buying this?”. Instead it’s best to speculate and let them correct you.
So you could ask something like “Busy morning?” when someone comes in and buys a few granola bars. If they seem friendly and they answer with more than one word, then you can ask a bit more “Would you buy a pre-made breakfast sandwich if we offered one?” or “Have you ever tried the _____?” It’s just a bit of insight at a time, but it can be very helpful and you may find a customer who has a bit more time and is willing to give you other, more valuable insights.
Find out where else nearby they can get it.
If your boutique is in a shopping mall, chances are there’s a competitor nearby. You can see what else your customers are buying by simply walking over. You may have to do a web search or take a drive to see what nearby competitors may be up to.
Don’t be afraid to walk right in and check out your direct competition. You can also ask employees questions. Oftentimes, they don’t realize you’re doing competitive research, but it’s best to be upfront about it if they ask directly. Hiding your motives or making a break for the door is a surefire way to breed suspicion and be seen as underhanded.
It’s a good idea to get to know your nearby counterparts. If you’re a business owner, sit down for coffee with other business owners who aren’t direct competitors in your market. Try to learn from each other. I guarantee you they have some insights you haven’t considered. It’s always good to build your professional network.
Think like a Customer.
It can be difficult to get out of your own head, but it’s crucial that you look at every business the same way a customer would. It may be a good idea to recruit a friend or family member here to give you an unbiased review.
Try to notice little things like temperature, music (or lack thereof), and smell. Many businesses never think of something like smell, but your customers will be drawn or repelled by how your business smells more than you may realize. Take note of what people like about your competitors and what they don’t like.
You may also want to ask your employees. What do they think and what do their friends think? It’s never a good sign when someone who works in a business would never want to be a customer. Make clear that not every suggestion will be implemented, but having too much feedback is far better than not having enough. You can also pick up on patterns. If three different people tell you your signage is confusing, you know it may be time to start making changes.
Context is everything. A high-end designer boutique is going to do better in Lower Manhattan than it will in a small-town main street. A surf shop is probably better-suited to Southern California than it is to Chicago. The competitive landscape around you will do a lot to determine your fate, oftentimes, that single factor outweighs even the best efforts.
Take a look outside your walls, zoom out, and be as objective as possible. What other options do your customers have? Why are you the best one? How do you compare to even your best competitor?
Ask those kinds of questions and you’ll see the difference. A healthy sense of competition will also motivate your team and give you clearer growth goals.
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