The typical strategy for getting new customers is usually and erroneously to steal customers from the competition. Businesses are constantly battling each other. Spending far too much time worried about their competitors and competitors customers. Aside from the fact that they should be focused on their customers and not the competition’s, there are better ways to increase business.
A Bigger Slice of Pie
Every business wants a bigger slice of the pie. Their minds are heavily focused on how much of the market they own. This leads to a constant back and forth game with competitors. It leads to price wars and cutting corners to be the cheapest on the market. It’s a narrow minded approach to business but it is a broad mistake many businesses are making.
Instead of trying to take a bigger slice, how about making a bigger pie and leave your competition with slices of the smaller one?
If you have ever done a full business plan (garbage in most cases), you may have an understanding that in a given area there will be x% of the population that will utilize your product or service. And so you know that if you can get x% of x%, you can make x amount of profit. This is looking at the pie and figuring out how big of a slice you need to survive.
Interestingly however, I have found and you will too, that when you see an extremely successful business who goes after a bigger pie and not a bigger slice, you have a larger percentage than normal utilizing their service or product. I have seen businesses in small towns that have more customers than the biggest business in a big city. Where percentages of the population using their business is far above the normal average. Why? Because they made the pie bigger.
How to Make the Pie Bigger
There are a couple ways you can make the pie bigger for your business. One way would be to introduce your product or service to a new market. Look for the customers who are not doing business with any of your competitors because they have not been sold on what you offer.
Let’s use a martial arts school for example. Instead of the school owner worrying about how many students their competition has and how they can poach a few here and there, they can simply look outside of that “pie” and reach new customers. They can target corporations that may be looking to offer something fitness related to their employees. They can target other sports by creating specialty programs for baseball or football players, etc.. Often times martial arts school owners see other sports as competition. They should be seeing them as an opportunity to grow the pie.
Using the same example of a martial arts school, the owner can also create a bigger pie by adding other services. They can hire a yoga instructor and offer yoga as well. This not only brings in a new revenue stream, it also gives them a new market that may convert over to the martial arts. They can offer specialty classes for women who do not want a black belt but would like to learn self defense.
If you really take the time to look at what you can offer, you can always create a bigger pie. Listen to the market and offer something different than the businesses they are ignoring. Create an environment that beats a stereotype about your business. Offer other services that compliment yours. If you are constantly trying to getter a bigger slice, eventually you will run out of pie.