The business world is filled with small businesses and tiny startups hoping to break through the noise and make it to the top of their industry. Unfortunately, the reality is that only 4% of companies ever make it past $1 million in annual sales. And even when companies bust that ceiling and even generate $10 or $20 million in sales, many still struggle to create loyal customers and massive profits – and here’s why:
Lack of Differentiation
What keeps customers coming to one company over another? The answer is simple. Great companies are different and better than their competitors. They understand and solve their customer’s problems. They have a compelling value proposition, a meaningful brand promise, and an amazing product or service.
Strategies to Differentiate Your Business
- Pick a niche and specialize (Big Green Egg)
- Innovate (Apple)
- Create a unique business model (Kahn Academy)
- Become the expert in your industry (Dave Ramsey)
- Make it easier to do business with you (Uber vs. Taxis)
- Solve a big problem (Tesla)
- What do your clients like most about your product or service?
- Why are long term clients/customers still with you? Why do they refer you?
- Why do clients/customers leave?
Want more ideas? Check out this great post from HubSpot:
10 Companies That Brilliantly Differentiated Themselves From the Competition
Weak Sales Offers
People are bombarded with over 6,000 ads and sales offers every day. In such a noisy world, your sales offer has to stand out and resonate with potential customers. To stand out in today’s world, you have to be creative and daring. You can’t get by doing the same thing everyone else does. Some companies use techniques like:
- Money-back Guarantee
- Exclusivity (limited quantity)
- Urgency (buy now)
- Charity (buy one, we donate one)
- FOMO (fear of mission our)
These kinds of sales offers are likely to attract more attention from your audience, get your free publicity, and pull in more business than your ordinary competitors.
Think of TOMS shoes. They say “We’re in business to help improve lives. With every product you purchase, TOMS will help a person in need. One for One®.”
The root of many problems in a company can be traced back to management. This is a complicated role that involves communicating objectives handed down from executives into achievable goals for their employees. In fact, the failure to define goals is one of the most common management problems.
It goes without saying that miscommunication in the office can negatively affect business. Providing unclear objectives and goals for lower management and employees means that not everyone is working toward the same goal. This can confuse your employees and, more importantly, your customers. Miscommunications are also the perfect storm for wasting time and resources.
Disengaged employees are those that have “checked out” or lost their passion for the job. Initially, a single disengaged employee seems like a minor issue, but disengagement can become a much bigger problem on the whole. First, dissatisfied employees can become expensive because they have more absenteeism and more turnover than an engaged, content worker. Constantly hiring and training for the same position can drain money for your business quicker than you think. Secondly, disengagement takes a toll on customer satisfaction. Careless workers can make mistakes that often the customer has to pay for. In the end, an unsatisfied customer will likely have many other options to choose other than you, pushing them to towards your competitors. Lastly, displeased laborers affect productivity, as they tend to put less care and effort into their work. A few mistakes here, a few late deadlines there. This can waste precious time and resources. One solution to the problem is implementing a key performance indicator tool (KPI) to help measure your employee’s effectiveness. A KPI that is designed to inspire action and translates company values into a clearly defined objective will be the most powerful in boosting productivity. Without this incentive, your employees will lack accountability, negatively impacting your business.
A tell-tale symptom of a struggling company is insufficient business planning and forecasting. Proper planning for the long-term can help lay out those winning moves that will boost the company forward. Navigating a business through changing environments requires consistent holistic analysis of the company and keen anticipation of the challenges ahead. Companies functioning short of comprehensive long-term planning will fight to keep afloat as technology grows and industries change.
Subpar (or Nonexistent) Digital Presence
We are well within the age of information, so having an enriched digital presence is essential at the very least. That being said, there is a big difference between having a true presence and simply existing online.
The first indication of a company’s performance online is their website. A website is the first resource for potential customers to see who you are and why they should buy your product or service. One could imagine why an inefficient, subpar website could contribute to a lower conversion rate.
Let’s say your website is decent; it may be even good. The next big hurdle is social media. It isn’t enough these days to just have an account with your name listed in Facebook, LinkedIn, Twitter, or Instagram. Where most companies struggle is posting content that’s meaningful and engaging for readers. Producing results on social media depends heavily on many industry- and target-specific factors. Optimizing your social media efforts can be a daunting task for this reason. But that is also why it is so important.