Two years ago, Maria made the bold decision to leave her job as a project manager to pursue her dream of starting her own business.
Maria raised two common questions that most entrepreneurs have probably encountered:
- How can I attract more customers when there are cheaper alternatives available?
- What strategy should I adopt to boost my sales in the face of stronger competition with more financial resources?
These questions are frequently asked by small businesses competing with larger supply chain entities. However, the focus is often on the wrong aspect: cost. If you want to break free from the price competition cycle, keep reading for my top three tips for thriving as a purpose-driven business. Making a conscious decision to move away from price-based competition will truly open up new opportunities for your business.
1. Get clear on your mission.
Competing solely on price or cost is a losing battle. There will always be others willing to go out of business faster than you by further reducing prices to outdo you.
Therefore, if we understand that this is not a sustainable strategy, where can you set yourself apart? Where can you challenge them?
In the realm of purpose. The strength of a small business lies in its passion, dedication to its mission, and the belief that it can make a positive impact. Companies that compete based on price often focus solely on their bottom line; they lack the heart that drives smaller businesses.
If price isn’t the battleground, then we must elevate our mission, passion, and purpose to a higher level.
Take TOMS as an example. Their shoes may not be the cheapest, and personally, I may not like their appearance. But people buy TOMS shoes for a reason: the company donates a third of their profits to causes they are passionate about. People purchase their products not because of the low price, but because they believe in the mission and purpose the company stands for.
You must have a crystal-clear understanding of who your company is and what you aim to achieve. Your passion is your key to success: People are willing to pay more for something they believe in.
2. Attract your tribe.
Once you’ve defined your mission, you need to identify customers who share the same passion—you need to attract your tribe. Ask yourself, Who is my ideal customer? Where do they spend their leisure time? How can I reach them? What do they value?
You don’t need to appeal to everyone; you just need to connect with enough individuals who are aligned with your vision. Narrow down your focus to a specific group of people who are enthusiastic about the work you do. Once you do that, everything changes. Your messaging will resonate more strongly with that audience, leading to more loyal and committed customers. Those seeking the cheapest products will always move on to lower prices. But those who believe in your purpose, who get to know you and understand what you stand for, are much more likely to stay.
How do you attract your tribe? Emotions. Logic sparks thought; emotions drive action. Review all your marketing efforts and ask yourself, Am I appealing to emotions or logic? Understand who your tribe is and find a way to engage with them on a deep emotional level.
3. Find your tribe a home.
As a bonus step, you need to establish a space—a Facebook group, an email newsletter, etc.—where the community you are building can come together.
It’s one thing to convey your message and have customers buy your products. But it’s another thing to create a community of like-minded individuals who can share common goals, connect, and become loyal brand advocates.
Consider this, Where am I directing these people to create a community? If we do not rally around the community we are cultivating and show them appreciation, then we are missing a chance to foster a stronger affinity for our brand. Leaving them scattered across various platforms where you found them will make it much harder to build the loyal community you seek. Additionally, it is always more cost-effective to sell to existing customers than to acquire new ones.
If you run a small business like Maria’s and are trying to compete with larger corporations, avoid falling into the price competition trap. Define your identity, identify those who resonate with your mission, bring them together in a community, and witness the transformation of your business.
