Small Business: How To Avoid Price Competition [Research]

7 Small Business Tips To Compete Against Showrooming

Showrooming For small businesses with an offline presence, the expanded consumer practice of showrooming is a double whammy—it can hurt sales and reduce margins. With the increase in smartphone ownership, your competitor is in your prospect’s handbag.

In Dynamic Pricing in a Smartphone World”, Parago examined shopper showrooming behavior.

Showrooming is a prevalent behavior among smartphone owners. (Here are 67 mobile facts to provide more background.)

Showrooming is a prevalent activity in-store

58% of smartphone owners use their phone to compare prices while in-store! The search for the best price is the driving factor for most smartphone comparisons, followed by customer feedback.

What information shoppers check for in-store via mobile

  • 46% cite best price as the most important factor.
  • 28% cite customer reviews as the most important factor.
  • 13% cite expert reviews as the most important factor.
  • 11%  cite product information as the most important factor.
  • 3%  cite social media peer comments as the most important factor.

Although Amazon is the go-to-source for most shoppers, underestimate customer ratings and review and comparison sites at your peril.  What information shoppers check via smartphones in-store

  • 92% of shoppers check Amazon.
  • 84% of shoppers check Google.
  • 78% of shoppers check customer ratings.
  • 77% of shoppers check comparison websites.
  • 75% of shoppers check apps.
  • 55% of respondents check social media.

Bottom line: You’re not going to reverse the trend towards showrooming. Therefore you must create a plan that enables your business to thrive despite this trend. For most small businesses, this means not competing on price.

7 Small business tips to compete against showrooming

1. Develop a USP

I’m referring to a unique selling proposition, a term developed by Rosser Reeves, one of the original mad men. Remember: the core to creating a USP is to show your offering’s value in a way that distinguishes it from the competition. Need help with your positioning? Check out Trout and Ries’s book, Positioning: The Battle for Your Mind .

Actionable Small Business Tips:

  • Determine what makes your business different from both your online and offline competitors. Understand that these factors may be different based on platform. Online your competitors may be national or global.
  • Consider near substitutes for your offering. Most marketers are myopic when it comes to competitors. Therefore, ask your customers what other options to your products they’re considering and why. You need to gather as much information as possible.
  • Gather feedback from your customers. To put a Nike spin on this, just ask them. Even better, take your information gathering a step further and invite a small group of customers in for an informal after hours wine and cheese to gather their input.

2. Determine how you can capitalize on your business’s unique attribute.

Consider how you can leverage your specialness to set you apart from the competition. In essence, you’re creating a brand for your small business.

Actionable Small Business Tip:

  • Put your USP into action to attract prospects and customers. For many small businesses this translates to utilizing the power of your location to attract and engage prospects. Provide reasons for people to visit your business by offering special services. Don’t underestimate the value of human interaction.

3. Make sure your business is mobilized.

If your prospects and customers are looking for information via their mobile devices, then you need to have a mobile-friendly presence.

Actionable Small Business Tips:

  • Have a mobile website that’s focused on the activities customers seek on-the-go. This type of website is targeted at smartphone users.
  • Alternatively, use a responsive design. This means that your website adjusts to the user’s screen size. Responsive design is useful for prospects and customers who want a fuller product experience via tablet from the comfort of their couch or bed.

4. Be present on social media platforms where your audience is.

As a small business, you may not have the time or resources to be highly active on a variety of platforms. Further, it’s better to be good at one or a few than to spread yourself too thin.

Actionable Small Business Tips:

  • Stake your name. While it’s important to focus your social media efforts, take the time to establish ownership of your business name. This is important for branding. In fact, U-Haul had this issue on Instagram.
  • Be strategic in your social media engagement. Go where your prospects and customers are.
  • Provide useful content. Incorporate a blog, photographs and/or videos. Blogs and YouTube also support your search optimization efforts.
  • Use platforms that support and yield sales. Think Facebook, Pinterest and special platforms. 

5. Build your house file.

This is your tailored list of prospects and customers who are interested in hearing from you. Offer a diet of more than just promotional push communications. Provide a variety of useful information as well.

Actionable Small Business Tip:

  • Use every interaction to help build your house file.  Before you make a face and think “old school marketing”. Think in terms of both email and mobile. Appreciate that email is social media marketers’ best kept secret. Make sure that your audience is interested in receiving promotions and other information from you. Don’t forget to have a paper sign up next to your cash register.

6. Encourage customers to leave reviews and comments.

Small businesses have the advantage of knowing many of their customers, often on a first name basis. Leverage this relationship to help expand your presence on review sites and social media.

Actionable Small Business Tips:

  • Ask customers to review your business or product where appropriate. While this happens most with experiential brands like restaurants and hotels, it’s important across the board.
  • Take photographs or videos of your customers using your product. Of course, you must ask for their permission first.

7. Track how well your efforts are working.

As small businesses know all too well, resources are limited. Therefore you have to make sure that everything you do yields profitable results. This doesn’t mean you shouldn’t test new ideas. Rather you must measure each activity to determine what’s working and what’s not.

Actionable Small Business Tips:

  • Start by counting what you can. It’s better to measure something rather than nothing, even if it’s only vanity metrics like social media shares. Not everything is going to yield big results. What matters are that you start to keep a record of how well your marketing is doing?
  • Measure sales and costs back to your efforts where possible. This can be easier with last touched efforts such as sales staff and search.
  • Set reasonable objectives and assess your progress. You don’t need a big company finance department. You can take some salient metrics and track those against the prior month and prior year. If you’ve set a budget, then measure your results against that as well. Don’t forget to keep track of unusual events that have an impact on your sales.

 

Understand that you won’t be able to meet the needs of a portion of your prospects and customers who always seek the lowest price. (Some of them did this in the pre-smartphone days.) That said, as a small business you still have the ability to enhance the value of your offering to drive profitable sales.

What has your experience been with showrooming? How have you dealt with this challenge?

Happy Marketing,
Heidi Cohen


Heidi CohenHeidi Cohen is the President of Riverside Marketing Strategies. You can find Heidi on , Facebook and .

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  • Ann Smarty

    It is amazing how many companies do not have a USP. Sometimes the USP is more simple than what the business owner thinks it is. It just takes some time to sit down and define it, in some cases.