Local Business: Resisting the Urge to Match the Competition

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Ask a Marketing Expert was a little sparse this week, but the discussion was very meaningful.  Many small businesses face a problem similar to the one posted by a restaurant owners this week.  He faces competition for limited customers and one competitor is getting more sales because he’s using a coupon to draw customers.  What can small business do to fight such competition, especially when they have limited resources for marketing and advertising?

I recently made a presentation to the small business administration dealing with this specific topic — doing good marketing and advertising on the cheap.  The presentation has been archived on our Authorstream channel and you can view it here.  Of course, your other option is to contact the experts at Ask a Marketing Expert for help, which is exactly what happened this week.  Here are their answers.  Here’s the question:

I have a small restaurant in an office food court. Most of last year and since the beginning of the new year, the owner of the restaurant besides me is handing out coupons daily during peak lunch hour. This has been significantly impacting my business and I just don’t know how to overcome this challenge. The day the coupons are not dropped, I do well.

Any suggestions is appreciative.

And here are the answers from the Ask a Marketing Expert experts:

Nancy Loderick How about offering to accept these competitor’s coupons?

Mark Eduljee

Think of root cause: its the perception patrons have in this case is that that the other place is a better “deal”. The coupons are just a delivery method. And not responding is reinforcing that message. Level the field by offing their own “deal”… using signs, your/their coupons, dancing clowns, whatever. Figure out what customers want first, and the delivery method will follow. Its not about “coupons”. Its about delivering percieved value and experience. Address that and he/she’ll do better throughout the week. Keep us posted on what happens!
My own response would be that its ok to accept the competitor’s coupons, but I would avoid generating your own coupons.  This just generates a price war where both parties are likely to lose.  A price war favors whoever has the deepest pockets and can bankrupt both parties with the real winners being other businesses operating in the food court.  A better suggestion is to focus on delivering a superior product — either in terms of quality or by better matching your product to the tastes of folks in the neighborhood.
Developing personal relationships with them can also be very valuable.  So, get to know your customers by name — likely you get many of the same folks day after day.  Don’t be shy, either.  Step from behind the counter to give out samples and stimulate discussion with folks as they make their way through the area.  Its hard to compare saving a few cents to loosing a friend who operates right next door.  Having weekly specials might also allow some price competition without having it degrade into an all out price war.
I hope this helps and let us know how things are going.

Next, I always invite attendees to introduce themselves when attending Ask a Marketing Expert.  Here’s more about 1 of our frequent experts.

Hi all – Nancy Loderick here. I’m a content marketing strategist. One of my projects involves choosing a web platform – we’re deciding between joomla or drupal. I’m looking at this from a marketing/content perspective, not so much the technical side. The technical side is important, but this website is about content and showcasing the company’s expertise.

Functionality we need:

Some of the functionality we need:

**search engine friendly urls
**registration for opt-in mailing lists
**core blog plus a blog roll feed
**job application
**ability to create forms for landing pages
**event component, ie promoting events and
registering for events.

I’d love to hear if anyone has experience with either of these platforms.


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  1. Stephany Hochstetler says

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