Competition online and how to combat it

22Aug11

I was just speaking to a client who was a bit disillusioned with online marketing. He has now semi-retired and works from home servicing some of the clients he used to serve when he had a large premises near the town centre.He told me that, when his business was at its peak, he had only four competitors, all of whom were within the county. When the internet became more widely used he suddenly found himself with hundreds of competitors; all selling at low prices and he felt he could no longer compete, nor did he want to. Whilst he was finding his new situation a challenge, he wasn’t confident enough to get back in the arena. I understood his frustration but not every business owner is at a stage where they can take retirement so the issue of increased competition needs to be faced. My advice to business owners would be:
1. Do not feel under pressure to reduce prices. If you do not maintain margins you will end up buying in unprofitable business. Remember that price is only one aspect of the sales process.
2. Add value to the sale – offer better service and communicate that in your marketing.
3. Increase off-line marketing and PR – use a variety of media to promote your products and services. Many of your competitors will be relying too heavily, or even exclusively, on online marketing and that could be their downfall.
4. Market your business in your local and surrounding areas – many purchasers still value face to face relationships and will welcome a local supplier, even if it means paying a premium.
5. If you can’t beat them, join them – make sure your website is as good as it can possibly be. It needs to draw customers in and keep them involved. Then it needs to invite a response – the old rules of ATTRACT attention, provide INFORMATION, provoke DESIRE and invite ACTION still apply and you’d be surprised how many websites fail to do any of these adequately.

For mature businesses to survive and thrive nowadays the internet and social media should be viewed as opportunities rather than threats. When my client gets bored with golf, we’ll get together and see how a creative, cross-media campaign can get him back in the limelight.

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Tags: AIDA, buyers, competition online, customers, relationships