Saturday, June 22, 2013

The Business Chat - Rise above your competition


“There’s too much jewelry/soap/scarves at this show, I can’t make any money!” And if you think there’s a lot of work similar to yours at a craft show with 150 vendors, try looking on Etsy where there are over 800,000 active sellers. 
You have competition. 
Deal with it. 
Let’s use the examples of Amy and Betty. Both make really good quality jewelry using semi-precious stones and sterling silver. They both have decent craft show displays, a good website with quality photos and they both have a reasonable mailing list. Yet Amy has a lineup at her craft show booth and is selling like hot cakes online. Betty is sitting in her booth watching the tumbleweeds. 
Betty’s reaction is to lower her prices, desperate for a sale. She posts “SALE” signs all over her website. Betty has a few sales but finds she is now competing against much lower quality jewelry and her customers are all demanding more discounts. At the end of the day she is also making no profit. It’s a depressing, downward spiral. 
So what is the difference between Amy and Betty? Amy has found a way to stand out in her customer’s minds. Amy has been working on her branding. 
In a crowded marketplace it is easy to feel like Betty. How can we compete with so much similar work around us? 
The key to gaining a competitive edge has less to do with the thing you sell, and more to do with the way you position it. Most of the Amy’s out there don’t achieve success by creating a new product category — they manage to carve out a piece of their existing category and dominate it. How?
You need to find one or more meaningful differences between you and your competitors and building a reputation around them. 
Let’s use cars as an example. What if you wanted to look for luxury? Maybe a Mercedes Benz or a BMW. If you want value think Kia or Hyundai. Rich and hot? Go Ferrari. (keep in mind people that I drive a Ford Taurus and don’t know that much about cars, but this is what they make me feel). 
Each of these car companies has found how they are different and built a strategy around that identity. They found a way to stand out. 
So how do you stand out? 
Here are 5 steps to get you started. 
1. Understand your customer. 
There’s no point in being a luxury item if your customers are more concerned with value. Think of your ideal customer, what really matters to them? Are they looking for price and convenience or quality and service? Do they care deeply about the story behind the item? Be as specific as you can and note that your business may be serving many kinds of customers with the same work. 
The more you know about your customers and their particular needs, the better prepared you’ll be to resonate with them.
2. Know your competition.
Who makes or sells the same thing as you? And don’t stop at your direct competitors — are there other products that satisfy your customer’s needs? Look for gaps in the market or areas where other shops aren’t meeting customer needs well — these are ripe opportunities for sellers to compete.
3. Know your unique value. 
What are you really good at? Are you a perfectionist with incredibly high quality standards? Do you source out really unique raw materials? Do you love working making custom projects? Do you know a lot about a very specialized market? What makes you so incredibly special? (because you are.)
4. Decide on a positioning strategy. 
Ask yourself this, what’s the one thing I want to be known for? There’s almost no limit to the ways you can differentiate your shop, but some of the most common strategies are:
Some common strategies are:
  • Rare materials - sourcing out materials that no one else uses.
  • Design - unique aesthetic or functional design.
  • Service - always exceeding customer expectations.
  • Niche market - finding an area that few others are in
You can also stand out with your specialized techniques or process, personal story, or the way you make your customer feel. What is important is that whatever you decide is your special advantage must be a big deal for your customer. Maybe your technique is so rare that you are the only person on the continent doing it but if your customer is only concerned with getting a gift delivered within a week then your technique is irrelevant. Make sure your special advantage is not easy for your competitors to copy. Just as you are checking them out, you can bet they are checking you out too. And while you may have several special areas where you stand out, your customer can only remember one or two. 
5. Keep all your business inline with your strategy. 
If you want to be known as a top quality, custom order friendly, unique jeweller, then make sure you are. No “Sale today! Only 200 left!” Buy only the best raw materials and tell the customers they are the best. Remember, branding is all about consistency. In every single aspect of your business. 
Competition isn’t always a bad thing. When you start looking at your “competitors” you’ll find that most of them aren’t working on things like branding and competitive advantages. Since you are, it’s easy to rise above them. Now aren’t you smart? 
Today’s homework - what do you want to be known for? What makes you so special? 

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