Business owners know that if they want to be successful they have to make a positive impact with consumers. Distinguishing your products and/or services from your competition has gotten more important but in recent years, increasingly more difficult. Here’s why:
Because the internet has changed the way people shop.
Due to the accelerated rise in online shopping in recent years and months, consumers have access to unlimited options when shopping for both products and services. Geographical boundaries are disappearing, and competition is rising.
Putting the growth of online shopping into perspective, in late 2019, e-commerce retail trade sales amounted to almost 1.85 billion Canadian dollars, with approximately 28.1 million Canadians having made purchases online. By 2024, revenue generated online is expected to surpass 33 billion dollars, up from 25.4 billion in 2019.1
Shoppers go online to do research, compare prices, read product reviews, weigh their options and make a purchase – all within minutes and from anywhere they want. Consumers make purchase decisions based on their online research and user reviews have a strong influence on their choice. In fact, 85% of consumers say they trust online reviews as much as personal recommendations.2
Because product differentiators don’t always exist.
There are many companies out there that sell very similar products to their competitors and they struggle to stand out – owners and managers across many industries face this threat. When all purchase considerations are the same, how do you win the favour of a perspective buyer?
It’s a challenging situation that is all too common in many industries. In the automotive industry, for example, you might find multiple dealerships located only 5-10 kms apart, that are selling the exact same make and model of vehicles.
Because the competition for attention is ever-increasing.
Print advertising is a widely used solution that has been successfully capturing buyer attention for over a hundred years, but, with radio, TV, and now multiple variations of digital ads thrown into the mix, consumers are inundated with more advertising than ever before.
In fact, Canadians see over 5,000 ads per day.3 Breaking through the advertising clutter with clever messaging and imagery is an uphill battle with competitors close at your heels. Developing innovative advertising campaigns that get noticed and attract target market is more difficult than it ever has been.
Because pricing is an unreliable differentiator.
To increase sales and be more competitive, the first response is often to host a sale or reduce prices to appeal to the general consumer’s quest for saving money. Over time, however, cutting prices eats into profits and can have long-term and market-wide repercussions. Being viewed as the discount provider can weaken brand image, devalue offerings and wreak havoc on values within the marketplace. If everyone starts lowering prices to compete, price is no longer a differentiator and an unsustainable price war could ensue.
Because it’s hard to stay top of mind.
In a crowded advertising landscape with consumer attention being pulled in many different directions, including their smartphones, businesses are vying for a harder to reach fragment of consumer awareness. Repeat exposure to an advertising message is necessary to make a lasting impression and stay in the mind of a consumer.
But, with all the other ads out there, how can you ensure they will think of your business when they are ready to make a purchase? Considering that most consumers start and finish their path to purchase online and the average internet user has an attention span of only 8 seconds,4 staying top of mind is more difficult than ever!
Rewarding your customers for their purchases can help you earn a long term place in the mind of your target consumers, tip the scales in your favour when you can’t (or don’t want to) compete on prices and help you gain more positive online engagement and reviews.
The competition might be increasing but with a loyalty program in place, your business will always stand out from the crowd.