Innovation can be key to standing out in a crowded market
Small businesses that are struggling to differentiate themselves in a packed market must address customer needs and focus on what they can do differently.
Few markets aren’t crowded these days, with competition coming not only from local companies but, thanks to e-commerce, overseas too.
In a connected world, services are no longer limited to our local high street. The shoes we step out in are often shipped from far-flung locations and lawyers can be just as effective working from home 20 miles away as they are sat at a desk in front of you.
Standing out in a crowded market isn’t easy, but innovation can help your SME attract the customers you need to stay in business.
To catch their eye, you need to solve their problems. That’s how Managed 24/7 found success in the crowded IT managed services market. Chief executive and founder, John Pepper, noticed that other IT services companies were leaving their customers offline for hours. To address the problem, the company developed fault-predicting software.
The idea came from listening to would-be customers. “Listen to your customers and your staff. Solving their problems will create your unique selling point and they will tell you what you need to create to compete and – just as importantly – stay relevant,” says Mr Pepper.
Our industry is undergoing a faster rate of change than ever before, he adds. Those who no longer innovate will naturally disappear.
Find a niche
Shoe-maker Iris Anson tells a similar story. Her frustration in trying to find the right footwear, despite a wide variety on offer, inspired the idea for her business, Solely Original, an online service for customised footwear.
Ms Anson took on an industry dominated by well-loved brands and disrupted by online shopping. She says that her business is driven by solving customer problems or difficulties and thinking of ways to resolve or minimise them.
Rather than go toe-to-toe with high-street brands, or mass-market budget shoes, her niche makes customisation accessible and sets her firmly apart from both. “We provide 3D visualisation for consumers to design their own shoes,” explains Ms Anson. “We do that by using footwear technology to obtain people’s foot measurements and provide a remote fitting service.”
She advises companies to remember that a proactive attitude towards innovation can set them apart in a crowded market. Companies that make a decent profit may have less of an incentive to innovate, but in the rapidly developing technological and consumer-driven world, the ability to innovate can reinforce competitiveness and win more business, she adds.
Establish a good work ethic
Alex McPherson and David Farquharson, founders of Ignition Law, agree that having the right attitude is key to finding a place in a crowded market, but they also add that this may come from personal philosophy, rather than a drive for innovation.
Their company offers legal and accountancy services to entrepreneurs, start-ups and others who work for themselves – because that’s how they like to operate, too.
What differentiates them in a competitive market is their people and attitude, says Mr McPherson. “The thing that’s quite innovative for us in a crowded market is the fact that we offer flexible working. Everyone works from an encrypted MacBook and the cloud, and apps allow fees to be tracked in real-time.”
Such tools mean that many of their legal experts can work from their Fitzrovia offices or from home, which can be as far flung as South Africa or the ski slopes of the Alps. That allows the company to employ the best staff for a specific job. Flexible working is a benefit that rival legal firms can’t match.
“It overcomes competition by ensuring that we get the best people,” adds Mr Farquharson. “Our staff can base their work around their existing life, and our technology and approach allows them to participate in really interesting work, while not losing that.”
Offer what your competitors can’t
Broadband provision is a crowded space that has proven tough for smaller operators, with BT, Virgin Media, Sky and TalkTalk.
Dana Tobak, founder of fibre provider, Hyperoptic, says that the crowded broadband market offers opportunities because rival suppliers are all offering the same thing. That’s partially down to the structure of the network; it’s split between BT’s Openreach and Virgin, which run fibre to the cabinet at the end of your street.
Hyperoptic’s innovation is not about running fibre all the way to your home, because that’s not the internet service provider’s (ISP’s) own idea. Instead, it set about finding a business model that would pay for expensive infrastructure without a pre-existing consumer base.
The company focused on installing its FTTP broadband to large apartment blocks and new housing estates across the UK at the build stage – a business model entirely different from incumbent ISPs, explains Ms Tobak.
Hyperoptic achieved success by looking at what the incumbent players were doing and finding a way to do what they couldn’t. She says that SMEs nees to think differently. “As a new entrant, you don’t have existing customers and revenue to lose, so you have no constraints.”
This article was originally published in The Telegraph and can be found here.