The internet has been revolutionary in the way that it has changed the way we live. Today, we can buy just about anything we need online, without having to leave our homes. In many respects, this has helped consumers who have been able to get easier access to a broader range of products, typically at lower costs.
It has also made it possible for businesses to trade with customers across the globe without ever having to step foot in another country, something that would have been almost impossible just a few decades ago.
However, the ease in which the internet has made it possible for you to do business also applies to your competitors. For many industries, there are now few or no barriers to entry since an online store can be opened quickly and with very little expense.
It’s even possible to have your products drop-shipped to your customers directly from your supplier, meaning there is no need for you to have warehouses or people to manage the logistics.
This means there are a lot more businesses competing with each other. This, in turn, means that businesses must find innovative ways to stand out from their competitors. If they fail to do this, they risk being lost in the noise generated by the many others in their sphere.
Price Competition
When you are selling a product or service that is identical or very similar to others online, it can be difficult to compete. For homogeneous products, the only way to compete can be on price, which is why comparison sites for insurance products are so successful. They allow consumers to enter their details and requirements and then receive quotes back from 10s or even 100s of providers almost instantly, with the majority choosing one of the cheapest options.
The problem with price competition is that it very quickly drives down profits as businesses engage in what’s called a “race to the bottom”. It’s therefore vital to find other ways to compete and to differentiate yourself from your rivals.
Here are some ways to do it.
Use a Free Trial Offer
While you may have the perfect product, some fantastic photos, and terrific text, it can still be a struggle to convince people to hand over their hard-earned cash. A great way to get around this is to offer a free trial.
If your product is as good as you say it is, then the customers will see its benefits and will be desperate to pay to continue using it afterward.
Free trials are common in many different sectors from subscription boxes, VPN services, and streaming services.
Money-Back Guarantee
Sometimes a free trial offer isn’t practical, then a money-back guarantee may be a better option. These are usually offered on products, while free trials are better suited to services and subscriptions.
The money-back-guarantee usually works by you giving the customer the facility to return the product if they don’t like it. It is a technique advocated by Tim Ferriss in his book, The Four Hour Work Week”. In it, he said that his research showed that money-back guarantees significantly increased the conversion rates of his websites, yet he had very few requests for refunds.
Money-back guarantees are common in many sectors, but one of the best examples is in the mattress industry. For example, in the UK Dorme, Eve, Silent Night, TEMPUR, and Simba Sleep all offer money-back guarantees for their products that range from 60 to 200 days. Most seem to have calculated that few people will actually bother to request a return, and therefore the cost of the money-back guarantee is low.
Focus on a Niche
You can’t be everything to everyone. In trying to cater to the needs of different customer groups, you will confuse your marketing message and not please anyone.
Research your market thoroughly and look for small groups of customers that have specific needs and develop your offering to these. By doing this you will be able to understand the problems that your customers have and develop a product or service that solves it.
An example of this is an ad agency in the United States called CJ Advertising. They provide their services only to law firms that take on personal injury cases. It allows them to specialize and be the best company for personal injury lawyers to turn to.
While this niche severely limits the number of potential customers they can serve, they can pick up a larger proportion of the small market segment that they target.
Do Business Better Than Everyone Else
It may seem a bit obvious, but by being the best in your field, you can build a reputation for it. That reputation will often create loyal customers and create many advocates.
Amazon is a great example of this. You can buy from Amazon and have the products delivered to you the next day, while many other companies charge a fee for such a privilege. If something goes wrong, customer service is usually quick to respond and the return process is quick and painless.
This creates loyal customers. They know they can get the product quickly, and there’s no second-guessing that comes with some other retails. They also know that there is someone there to help if something goes wrong.
Online Reviews
Offering great service can then yield further benefits, as customers will be willing to leave positive reviews about your business and products.
Research has shown that as many as 91% of people read online reviews when making purchase decisions and that 84% of them trust an online review just as much as a personal recommendation from someone that they personally know.
Ask your customers to leave reviews on your Google My Business listing and TrustPilot. This will help to show that you are a genuine business, that your claims are true and that you can be trusted.
You can even automate the process by having an autoresponder email that follows up with customers several days after their purchase to request a review.
Case Studies
Going one step further than reviews, case studies can provide a more in-depth look at the service you provided to a customer and what benefits it had to them.
A good case study will explain the problem that the customer had, how your product solved it, any challenges that you had to overcome in delivering the service to the customer, and any statistics that can quantify the impact you had. For example a “10% decline in serving costs with the new product”.
Photos of your product/service in use, as well as a testimonial, will bring your case study to life and help to demonstrate your success with this customer.
Make Your Website Secure
Once you have the customers on your site and convince them that you offer the product or service that they need, you must make them feel that their personal and financial details are safe.
For as long as most consumers have had access to the internet, a little small padlock symbol shown somewhere by their web browser has been the way to show that a website was secure.
Most of the time this little padlock symbol only appeared for the checkout process of online stores, but this has changed in recent years.
The padlock symbol appears when the web browser detects that a valid SSL certificate is available and that HTTPS is being used to encrypt the communication between the user and the server.
Today, Google expects all sites to use SSL and it ranks sites that use HTTPS higher in its search results. Additionally, its Chrome browser displays a warning that the site is insecure if it does not have an SSL certificate.
Customers are therefore likely to see your site as a risk and choose to shop elsewhere.
If you don’t currently have an SSL certificate, you can buy them easily. Alternatively, you can use Let’s Encrypt which provides them for free.
Speed Matters Too
Research has shown that customers don’t like slow loading websites, with some believing that the low speeds are a security risk. The Aberdeen Group has conducted research that shows eCommerce sites can see a 7% decline in conversions from a delay of just 1 second.
Use tools like YSlow and Google PageSpeed Insights to learn why your site is slow, and then work through any actions it highlights.
Use Trusted Payment Methods
Using trusted payment methods is important in driving conversions. Users want to pay in a way that makes them feel safe and with a method that they’re familiar with. PayPal claims that telling your customers you accept payments through its system can increase your conversion by 3%, so it may help to add its logo to your site.
You may also be able to cater to a niche market by accepting less common payment methods. For example, cryptocurrencies have a loyal following and like to find online stores that accept Bitcoin.
Standing out against other businesses online can be difficult, but it’s important if you want your venture to be a success. From offering free trials and money-back guarantees to simple things like making sure customers feel secure on your site can help you appear to be the best choice for them.
