Of the many challenges entrepreneurs face, possibly none are more complex and misunderstood than responding to competition. This is especially true when the other companies in your industry already have decades of history, and you are left playing catch-up against well-funded, well-oiled machines. How can your humble brand possibly differentiate itself? It's not always easy, but the solution begins with honing in on the basics of the business and working outward.
When my team and I first got our start in the sleep sector in 2006, we knew we were at a disadvantage compared to industry incumbents. At the time, Mattress Firm boasted 300 stores and Sleepy's had nearly 400. By 2015, Mattress Firm had acquired Sleepy's and, together, they generated more than $3.6 billion in sales annually.
For a small business like ours to even have a chance at success, we knew we had to approach things differently. Below are three strategies we employed to capture market share as the underdog in the industry. These tactics have served us well as we've experienced triple-digit growth year-over-year for Amerisleep, even as our competitors have grown their sales too.
Establish a differentiated value proposition.
The overarching goal of branding, marketing and sales is to effectively and efficiently communicate your value proposition to your prospects and customers. But how are you going to accomplish this goal if your value proposition is ill-defined in the first place? That's why your first step on the journey to standing apart from the competition must be refining your value proposition.
Although you may sell similar products with similar features at similar price points to your competitors, your value proposition is still singular, just as theirs is. Your company isn't just an idea, a product and a price. It's a fusion of people, experiences, feelings, attitudes, needs, and hope. A study by Newport Board Group indicates that only 7 percent of leadership teams are able to articulate a cohesive value proposition, so there's a good chance your competition may be part of the other 93 percent.
For us, we've focused our business on delivering better, healthier sleep by producing affordable and eco-friendly mattresses and bedding accessories sold directly to customers. We also invest in educating our customers about smarter sleeping habits so that we can be a trusted resource when they need help improving their sleep quality.
Reinforce your brand messaging at each customer touchpoint.
Once you have a detailed view of what makes your brand unique, then you can begin crafting messages to convey that information to your customers. After all, your competitors can have a remarkably compelling value proposition, but if they can't devise the optimal channels and methods for delivering that value proposition consistently to customers, it leaves room in the market for someone who can.
Shoppers have to be guided through the buying process, and it's your job to hold their hand throughout. Show your customers how your products and services better cater to their needs than your competitors do. At Amerisleep, we reinforce this in our email marketing campaigns, social media strategy, re-targeting ads, and public relations stories. We reiterate that our goal is to deliver customers a better night's sleep, not simply a mattress.
Emphasize value over price.
A mistake small business leaders often make is they lower their prices to undercut larger competitors. This, however, can be a slippery slope leading to a race to the bottom with everyone in an industry offering progressively deeper discounts causing margins to become razor-thin and forcing some companies out of business. Also, slashing prices to make your products more attractive than a competitor's offerings dilutes their perceived value. Instead, you should establish pricing that is fair and reflective of the value your customers will receive from their purchase and the effort you take to produce, market, sell, and support your products.
For customers who are cost-sensitive and insist they'd prefer to save money by turning to your lower-priced competitors, you'll want to reaffirm why your product is worth the asking price and provide evidence to support your claims. If you do an adequate job explaining your product's distinct value, then price will be less of an obstacle. Of course, after you've closed the sale, it is your responsibility to ensure your product delivers on its promised value so that you can build successful, long-term relationships with your customers.