Posted on 10 April, 2018 | 4 min
There have been more than 167,000 startups launched in the UK so far this year. In March alone, there were around 50,000 new businesses taking their first steps into the world, while some 2,500 have started today ¹.
At this rate, approximately 700,000 startups will have entered the UK market in 2018.
The world of startups is getting more and more competitive. So, what are you doing to stand out?
If you’re struggling to answer that question, here are a few ideas for sharpening your competitive edge.
Price to perfection
A lot goes into the science of pricing—more than we could possibly go into in this particular blog. But there are some pricing essentials to get right as a startup.
First, you’ll want to establish what part of the market you operate in—low-value goods or services sold in high quantities, high-value goods or services sold in low quantities, or one of the many spaces in between. It takes research of your market and competitors so you can find a niche in which to price your wares.
There might not be a market for a certain product at a certain price, so you may need to experiment small scale to find the sales sweet spot for your wares. Essentially, you’ll want to get maximum revenue from your sales by finding the point where you can draw the biggest square on a model like the one below.
Your business apps are a big help here, telling you automatically which are your most profitible products or services, and which you sell the most of, so you can refine your pricing and sales strategy while you’re still a startup. If you’re dealing in products, your POS and eCommerce apps will have a lot of information to help you make tweaks along the way.
Similarly for services startups, CMS apps can provide insight into your clients’ preferences so you can price accordingly. All the while, your business dashboard will give you greater visibility over your sales data, so you can make quick changes of direction when you need to.
Remember, the pricing strategy you set as a startup will determine how your brand is seen for years to come, so take some time to get this right.
Focus your offering
Don’t bite off more than you can chew. Time and time again, the best late-stage startups have solved a proven problem—sometimes just one relatively small problem—really well. So, find your niche and focus on delivering that better than anyone else can.
If you’re in the services business, you could focus on an industry whose problems you know all too well—a marketing agency dealing exclusively with legal firms, for instance. Instead of working with all kinds of clients and spreading yourself thin, you can be more attentive, specialised agency from day one.
From a product perspective, say you’ve reinvented the wheel. You might launch initially to car manufacturers as your main clients and revenue providers over the general population.
In both instances, there’s a smaller pool of potential customers, but you’re providing a solution your competitors aren't. With a new product, it’s a good way to test whether your idea has legs, and you can scale up to larger markets knowing you have a better chance of success. And on top of that, you’re making your business less complex in the startup stages—you’ll thank yourself later for that.
Find your unique selling point
This one is easier said than done, but there are tonnes of successful businesses that have disrupted some part of the traditional business model. That might be in how they deliver their service through technology, by cutting out middle-men or by selling goods as a service.
Look at retail subscriptions as an example. Selling goods as a subscription via eCommerce has grown in revenue by a whopping 4,461% in five years, with an ever-increasing 15% of online buyers now using some form of retail subscription service².
Companies like Dollar Shave Club have led the way, with a mantra along the lines of ‘why sell a razor once when we can sell you a new one every month at a discount?’ Then there’s Loot Crate: ‘we’ll send you a box of random geek gear every month’.
When it comes to thinking outside the box, these companies show how it helps to sometimes think inside of it, too. Our tip? Look for disruption everywhere, and see what’s missing from your industry that you can jump on before anyone else.
Deliver extraordinary service
An important caveat with our last point is that different for the sake of difference isn’t better. Your differentiating factor has to ease a specific, proven customer pain point or need.
In fact, an extraordinary level of customer service on its own is a fantastic differentiator—particularly for a startup. When the budget is too tight to play with your prices or change what you sell, and you’re selling similar products or services as your competitors for similar prices, where customers decide to shop will likely come down to the quality of the service they can get.
Exactly how important is customer service? Consider these three facts:
- 83% of customers need some form of support while making a purchase
- 89% of customers say they’ve stopped shopping with a business after experiencing poor customer service
- A customer is four times more likely to buy from a competitor if the problem is service-related compared to price- or product-related³.
Fortunately for time-poor startups, there are some great customer relationship management apps available to help you manage everything from the ticketing and allocation of customer support tasks to loyalty programmes.
The most important thing to remember is to discover what customers are crying out for—and give them what they want. Sounds simple, but we bet your competitors aren’t doing it perfectly. You, on the other hand, could be.