It has been said that “a little competition is good for business.” This is true. One benefit to a healthy amount of competition in any industry, whether it’s products or services, is that it brings prices down.
However, a saturated market, where there are many businesses competing in the same industry, can morph healthy competition into a price war market. That can be bad on many levels, but it’s quite often a reality that many industries face. And that reality can do a number on your profits.
There’s a line in the movie “Heartbreak Ridge”, Gunny Sergeant Highway says to his troops, “You’re Marines – you improvise, overcome and adapt!”
Those words should tell you that it isn’t over for your business. In this article, we’ll talk about 6 ways to increase your profits, even in a competitive market.
Study your competitors
See what your competitors are doing. Can you do it better? Is there something they are not doing that the market could benefit from? Also, try to find out how they compare in terms of pricing and value of similar products or services.
Keep this information handy. It will prove value later, as you’ll see.
Strengthen customer relationships
Find out what they want or need. Create a survey and send it to them. You could do it two possible ways:
- Ask them one question, like “What do you think we should do to improve our products, service or customer service” – something like that.
- Ask them a series of questions addressing specific items, like one question could be about the quality of your products on a scale of 1-5, another rating your customer service, etc. Narrow it down to 5 questions or less; 10 on the high end.
Offer what your competitors aren’t
Once you get enough surveys back, look for the 3 most common answers in the bunch. Now go back to your competitor research and find out if they are addressing those answers. If not, then you may have discovered some gold.
But don’t blow it off if you find that any of your competitors are serving those needs. Find out how well they’re doing. Can you improve on it? If you discover that they are not measuring up in those areas, there’s your gold. Now you can create a plan to meet the need.
Increase price and value
There’s a reason these two are mentioned together. If you feel you need to increase the price of your products or services, you need to find a way to give your customers more value to justify the increase in price. You could increase the value without increasing the price, but never increase the price without increasing the value.
If you’ve taken the first 4 steps, you’re bound to increase your revenue. But there are other things you can do along with those.
If you sell products, have a big sale to move them out. Here is where lowering prices might work. But don’t lower them so much that you lose money
Reduce or eliminate expenses
Look at your monthly expenses. Is there an item you can reduce funds going to it? If you have anything you don’t use, like costly memberships or subscriptions, eliminate them. It’s money out the window.
What if you have to replace your work truck? At a time like this, it is unwise to buy one. But leasing a work truck has proven to be a very cost-effective option, which you can find out from a company like Flex Fleet Rentals.