Patrick is a very worried man. I met him in a pensive mood in a coffee shop as he waited for me, having arrived long before the agreed meeting time.
His business had been declining steadily in the last one year.
Patrick has been losing customers in droves to the competition. All his effort to contain the situation has been fruitless.
Losing market share to rivals is one of the nasty experiences that give every business person sleepless nights from time to time. Continuous loss of market share if not checked can bleed your business to early death.
When you realise your business is declining and ascertain that it is as a result of your competitors’ activities, the first thing you should do is to be calm and not panic.
Panic may lead you into making irrational decisions that may turn out to be more disastrous.
Your first reaction should be to pay attention to your competitors’ activities and their products in order to react strategically.
Find out what is it that is causing your customers to migrate and don’t forget the reason could be the way you treat them, or your own products.
Avoid using your competitors’ strategies blindly and reacting head-on to counter the loss. For example, if your competitors are winning customers by lowering the price, you should not lower yours to counter it.
The best way is to come up with strategies to make your products more attractive and appealing to customers by addressing the issues underlying the migration. Sometimes the reasons could be deeper than they appear.
For example, some customers might cite pricing as the main cause when the real culprit is the value. The challenge is not your price but the perceived value they get from your products. In this case, you do not address the price directly but justify or prove the value aspect.
As a general guide, some of the strategies to regain market share must revolve around your pricing model, your promotional activities and the product itself.
You may need to address some or all of the three components. As said, dropping the price may not hold the solution. Focus on value addition at the same or even higher price. Also ensure you promote your products well in the market.
In most cases the greatest competitor is not people selling same or similar products — it is the lack of awareness. You need to get out and tell your customers and prospects what your products can do for them rather than sit down and lament declining business.
Finally, look at the relevance and convenience of your product in meeting people’s needs.
You may have to make some changes in the way you produce, package and present it to meet and exceed your customers’ expectations. Your competitors could be offering the same or similar products but packaging it or presenting it differently. This could be their competitive edge.
This article was first published in The Business Daily on December 4, 2018.