Are your competitors making more than you? It’s a problem a lot of small business owners face and on today’s episode of Mama Business, we’re talking about the 5 main reasons this might be happening AND what you can do about it!
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Related Podcast Episodes:
- #76: 3 Reasons to Choose Long-Term Strategy over Instant Wins in Business
- #66: Are You Making This Mistake with Your Business Website?
- #62: 5 Ways to Create an Amazing Client Experience as a WAHM
- #13: How to Streamline Your Onboarding Process and Sign More Clients
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5 Reasons Your Competitors Make More Than You
Competition is part of business, and it’s actually not a bad thing. Why? Well, there’s a couple reasons, actually. First, having competitors in your industry indicates that there are clients out there that need the products or services you provide. Talk about confirmation that YOU are needed! Right? Because somebody wants what you have.
Secondly, competition can also help you to uplevel your services. Think about the education and research you can glean from those that have gone before you in the industry. If you watch and listen closely, you might just be able to avoid the mistakes they’ve made and recognize the things that have helped propel them to success. Who wouldn’t want to see some examples of industry business failures and successes?
But, despite those good reasons for competition, it’s never a good feeling when you realize that your competitors are making more money than you.
Even worse is that, chances are, it’s something you’re doing wrong. So let’s take a few moments today to discuss the five main reasons why your competitors might be making more than you and what you can do about it.
Reason #1: You don’t know who you serve
As an entrepreneur, you know the value you provide to your clients or you wouldn’t be in business to start with. But when it comes to marketing your products or services, it’s likely you’re targeting the wrong people – or no one specific at all. If you don’t know who your true ideal client is, you’ll never be able to reach them in a way that turns a profit.
I’ve talked about this on previous episodes, and I’m sure it will come up frequently in the future. Why? Because it’s THAT important.
Small businesses that perform well take the time to get to know their ideal clients’ needs, desires, and habits, so that they can target their marketing efforts (you know, their websites, blogs, social media posts, and more) to their ideal clients. If you want your business to rise to or exceed the competition, then you should do the same.
Recognize what they like, and how you can best serve their needs.
Then, every marketing effort you put out into the world will be targeted directly to them. Meaning that they’ll see your stuff, know exactly what you offer, and understand how you can meet THEIR individual needs.
A good example of this is a client of mine who runs a travel business. Over the last few years, she’s been focused on helping people book destination travel to resorts around the world. She didn’t have any focus as far as which types of people she was helping OR what areas of the world she was booking these vacations in and she was always struggling to make ends meet.
Then, last year, she decided to niche down. Rather than serve EVERYONE, she made the decision to book only destination wedding travel to tropical areas and we changed all of her marketing efforts to reflect that. Within just a couple of months, she’d had more clients than she knew how to handle.
So, all this to say that knowing who you serve will make a huge difference in your profits.
Reason #2 That Your Competitors Are Making More than You: You aren’t willing to tell clients what they need (and then stick to it)
The client isn’t always right. While customer service is important, it may also mean that you’re going to have to tell your customers they’re wrong sometimes. As an expert in YOUR industry, you must show them what they need and why they need it. This is critical if you want your client to see the best results, plus, it’s likely they’ll blame you if it doesn’t work out.
This is especially apparent within the service industry – typically when you are desperate for those first few clients to pay the monthly bills.
In the early days of my business, I was happy to provide whatever service the client asked for. If they wanted Instagram scheduling, I was happy to do it, even if I knew that money spent for that wouldn’t have as big of an impact on their business as an SEO package for the same price.
Here’s the deal – those clients always moved on. They didn’t see the results they wanted and they stopped wanting to pay the money for the service. And…although they didn’t say it, my guess is that they weren’t very happy with me when it was all said and done.
The clients that do stick around are the ones that get results. Since those first days, I’ve become very clear with my potential clients about what will create the biggest impact for their business. Why? Because my job – my passion – is to see their business flourish. And I can’t do that if I’m not giving them what they REALLY need.
Remember, your goal should be to serve your clients in the best way possible, and that won’t work if you don’t provide the product or service that they actually need – so they can achieve their goals, too.
Reason #3:You are focused on “all the things” instead of what really matters
You can’t be everything to everyone. In order to succeed with your ideal client, you’re going to have to niche yourself and your small business down to provide the best results. There are many small businesses that provide valuable services to clients. There aren’t many, though, that do exactly what you’re passionate about. It’s a good idea to find your best product or service and focus solely on providing that to your potential clients.
One of the biggest fears that entrepreneurs have when they’re choosing a niche or cutting their business down to fit into a niche is that they won’t be able to reach everyone. Let me reiterate what I said earlier – this is a GOOD thing. If you are marketing to everyone, you are essentially marketing to NO one.
You can’t sell fishing lures to someone looking for a makeup palette. Case and point.
If you think your competitors are making more than you, chances are the reason for that is that they know what they offer their clients and show them the true value of what they provide.
So, take your cue from them and make sure that your products and services meet the needs of your ideal clients.
If they’re not, take the time to adjust them so that they do. You won’t regret it.
Reason #4: You don’t recognize your value
Oooooh – this is a big one and probably should be the topic of an entire series of podcast episodes, but we don’t have time for that today, so I’ll try to keep this to the point.
Your services or products are valuable in their own right. You, as an expert in your space, are even more valuable to your customers. But, do they know that you’re the expert?
And…even better – do YOU know that you are an expert?
Watch any ad on television, and you’ll quickly recognize that the competition isn’t afraid to point out that they’re the best, that they have the most experience, or that they’re offering something customers can’t live without. This poses them as an expert in the industry you’re operating in and is one of the reasons they might be seeing more profit than you.
You have to be confident in the results you get your clients AND THEN you have to share about those results.
When I say I’m excellent at what I do, I mean it. It’s not gloating or me being overly proud about myself. Instead, I know the results that I’ve been able to achieve for my clients and I’m not afraid to tell others about it. Why? Because if I don’t tell them that I’m great at what I do, they will end up dealing with a competitor of mine that is just out there to take their money and won’t get them the results they actually need.
So take a moment to consider that you are an expert. You have value. And then go out into the world and make sure your clients and customers know that.
Reason #5: You just plain don’t charge enough
Pricing is one of the biggest struggles for small business owners, especially those in the service industries.
What if I charge too much or too little?
What if I price myself out of someone’s budget or end up with clients that nickel and dime me?
You’ve probably asked yourself some variation of one of those questions at one point or another, right?
Here’s the deal – everyone is looking for the best value for their money. More often than not, that doesn’t mean they’re looking for the cheapest product or service. In fact, most people understand that you get what you pay for.
There are two different kids consignment stores in my town that I frequent.
One of them is on the cheaper end of things. The owners take in all brands of clothing and I have to spend my time sorting through racks to find pieces that might work. The items are, for the most part, cheaply priced, and they have a large selection jammed into the store. But, while my final total might be lower than it would be elsewhere, the items I go home with often don’t last very long before they get a hole or a zipper breaks.
The other is more of a boutique. The owner resales only the best, name brand clothing and I know that I’m going to pay a few dollars more per item, but there will be no stains or rips and the clothing will last. Toys and other equipment are also in amazing condition and everything is displayed in such a way that I don’t have to dig through racks to find what I’m looking for. I know without a doubt that when I walk out of that store, I’m going to get the best results with the items I’ve purchased.
Neither consignment store is better than the other, really. They both suit their purpose, but I get what I pay for, right?
People want value and sometimes that means they’ll pay more money because they know that they’re getting the best return for their investment.
Don’t undercharge to compete with the competition. You’ll end up underwater, burned up, and resenting your business. Instead, charge what your time, service, or product is worth and target those (ideal) clients that are ready to pay that price.
It’s Not About the Competition
So, I think it’s safe to say that if the competition is making more than you, more often than not, it’s our own issue and is related to one of these five things:
You don’t know who you serve.
You aren’t willing to tell clients what they need (and stick with it).
You are focused on “all the things” instead of what really matters.
You don’t recognize your value.
You just plain don’t charge enough.
It’s easy to focus on what’s everyone else is doing around you, but sometimes the best play is not to worry about whether your competitors make more than you. Instead, focus on who you serve and the best ways you can solve their problem. When you have a no-brainer offer that potential clients can’t wait to say yes to, you won’t have to worry about the competition again.
Jump into Action and Leave the Competition Behind
Alrighty, that brings us to the action portion of this episode and you know that I’m a huge proponent of taking action, because action is where the dreams turn into the reality. And that’s why every Mama Business episode comes with action steps you can take immediately to up level your mama life and business. Ideally you’ll take action on all of the things we’ve discussed today, but if you only have time for one, it’s this:
ACTION: Decide which of these five things we’ve talked about today might actually be keeping you from achieving the results you want in your business. Then, get to work fixing the situation. Find clarity regarding who you serve, determine how you get them results, focus on offering services or products that produce those results, acknowledge your value publicly, and/or start charging the appropriate amount for your products or services.
I know from personal experience that I am more likely to accomplish what I set out to do if I am accountable to someone. So drop me a tag or DM me on Instagram and let me know what action step you chose so that I can cheer you on throughout the process. Because, I am cheering you on.