Simple Tricks To Differentiate Yourself In A Competitive Industry

Simple Tricks To Differentiate Yourself In A Competitive Industry
August 13, 2015 Chris Tomlinson

Dark chalkboard with a Strategy diagram illustration.

In management strategy, there are five “forces” that determine the success of a business in an industry. These are known as Porter’s Five Forces and include competitors, threat of substitute, buyers’ bargaining power, suppliers’ bargaining power and barriers to entry. Effectively managing these five threats is critical to ensure a profitable business with healthy margins.
In competitive industries, there is always a threat of price wars that is more often than not a race to the bottom. So unless you are a big company with big pockets, it is recommended that you do not engage in one. But with price wars out of question, what levers can a startup entrepreneur pull to reach out to new customers? Truth be told, there are simple yet effective tricks that one can use to differentiate yourself and thus be visible in a competitive industry. Here are a few
Make Customer Service A Delight : Mention customer service and the company that comes to mind is Zappos. As an online shoe seller, Zappos is in an industry that is fiercely competitive. Before the company made its mark, the only way businesses penetrated the market was through discount offers. Consequently, margins were wafer-thin. Enter Zappos and the company made customer service the hallmark of their business. Interacting with a representative was a delight and this significantly shifted the dynamics in Zappos’ favor. Today, although Zappos has been acquired by Amazon, the tales of its customer service continue to be told among business circles. That is the power of using a simple trick to outwit competition.
Identify Bottlenecks And Fix Them : The easiest way to attract customers is to find “frustration points” in the system and fix them. This is especially true for businesses in industries like finance, healthcare and manufacturing. A lot of the leaders in this segment are still old-school and the system still has a lot of bottlenecks. In a recent interview, the President of Prosper Insurance Group said “small incremental steps” to be better have been critical to success. Some studies have shown that simply migrating to an e signature service in the financial services industry can improve customer retention by as much 6.4%.
Change Marketing Communication To Your Differentiator : It has often been found that in competitive industries, different providers inevitably end with a similar marketing message. For instance, when a loan marketer performs competitive benchmarking and notices that most rivals advertise their interest rates, they would inevitably end up marketing their interest rates too. However, the trick is to advertise your differentiator. Do you provide same day loan approval as opposed to the typical week taken by competitors? Market that. Are your customer service lines better equipped to handle requests compared to competition? Include this in your communication. The idea is that no matter how good you are at something, you are not likely to see customer approval until you market the differentiating factor.
We are barely skimming the surface with these above tricks. Depending on your industry, there are dozens of other simple tricks that one could use to differentiate and thus be seen. Have you been successful with a similar strategy? Share it with us in the comments.

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