In a growing business, competitors can be both a distraction and an opportunity. To stay true to your brand values, avoid some of the gimmicks they may employ to derail your productivity. Limit your response, or abstain entirely, when competitors make direct attacks on your business. Instead, focus your energies on creating a better customer experience.
Of course, when you notice other brands in your industry doing something right, pay close attention because they may unintentionally disclose key growth strategies you can employ and improve on to scale your business. Remember to also keep an eye out for any missteps they take, as those can also serve as valuable lessons. To be clear, I do not endorse a copycat approach to business-building. However, there are still some things your competitors may be doing, which can trigger innovation within your company.
For instance, at Amerisleep we've always believed in the direct-to-consumer business model. As a result, we sold our products exclusively online knowing that we could minimize overhead and provide customers with more affordable prices on better sleep products. But it was still clear to us that traditional mattress stores continued to capture a lot of consumer interest -- and sales. Currently, Mattress Firm boasts more than 3,000 stores nationwide and has been in business for more than three decades. Clearly, they were onto something.
Instead of just opening a store for the sake of opening a store though, we thought hard about what would enhance the mattress buying experience. For us, that meant paying our retail sleep specialists a salary without sales commissions, adding Dream Suites to allow customers to nap in privacy and prioritizing customer education to ensure shoppers walked away with the right mattress and accessories that they will love for decades to come.
When we look at our biggest competitors, we ask ourselves two key questions that can help us identify new ways to improve our business.
How are they building stronger customer relationships?
There are no two ways about it -- if you want to guide your small business into a market leader one day, you have to be great at customer retention. It's the single best way to build predictable, sustainable growth for your nascent company; the kind of growth that will enable you to spend wisely, hire effectively and deliver unparalleled customer happiness.
The statistics surrounding customer retention are unambiguous: research from Bain & Company shows that an increase in customer retention rates of as little as five percent can lead to a net profit increase of up to 95 percent.
Monitor interactions between your competitors and their long-term customers. See how the company responds, how they build relationships and how they address concerns. You can even seek out and interview some of their customers about their experiences. Learn their strengths and weaknesses when it comes to nurturing customer relationships, and discern where you have opportunities to fill a gap.
What are their customers' biggest complaints?
On a regular basis, I review the most recent customer reviews from each of our top competitors. I pay careful attention to the one- and two-star reviews to get a better understanding of why some customers were unsatisfied with their purchase. We listen with the goal of learning from other companies' mistakes.
In every industry, there are large businesses that have invested millions into their product and processes yet they still manage to underserve their customers. By exploring a brand's negative reviews, you can discover their most urgent areas for improvement and use that information to your advantage by developing solutions that can help you steal market share.