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Running a business and finding a niche that allows your business to operate at a profit that is better than your competitors requires entrepreneurs to be very strategic. Thinking strategically about your business includes mapping out the operations and being flexible enough to pivot and make incremental changes that lead to significant outcome benefits. Technology is a great tool to pivot, analyze, and find strategic advantages versus your competition.
Business Using Technology and Getting Beneficial
Traditional methods toward gaining a competitive advantage in business include focusing on customer acquisition and retention, attracting the best talent for your organization, defining your unique offering, and keeping costs low. Other traditional strategies to gain some competitive advantage in business include:
- Cost leadership
- Product differentiation
- Customer relationship management
- Cost focus
- Commitment to customers
Cost leadership is focused on keeping the prices for products and services lower than competitors can offer. It’s a volume-centric approach to sales. That is to say, selling at a lower cost with the benefit of selling more than your competitors is a strategy to take.
Making your products and services unique and highlighting those specific unique aspects is the philosophy behind product differentiation. It’s a driver in the commercial cell phone business, for example.
If you were to compare the basic functionality of an iPhone and a Samsung phone, there aren’t much in physical hardware differences. However, in the software and apps, there is a considerable disparity. So in this example, the companies would emphasize product differentiation with a spotlight on the software.
Customer Relationship Management (CRM)
Focusing on creating and maintaining positive relationships with your current customer pool and the potential leads you are nurturing requires a CRM strategy. Why is a CRM strategy important?
Because even a small change in attitudes and perceptions toward your products and offerings can drastically impact your sales, the best CRM strategy should utilize software to help track and promote positive customer interactions. Take short-term home rentals as an example.
If you’re a VRBO or Airbnb host, renting your home, for example, apartments for rent in Washington and maintaining a great relationship with past customers helps attract new business. If you had a disgruntled guest, either because of a misunderstanding or some issue out of your control going about and putting your business on blast in social media, your rental business could suffer.
A good CRM, such as an Airbnb software app, can help you maintain a good relationship with your past customers, helping drum up good reviews and enticing future guests to stay at your home. The best Airbnb software, in this case, is CRM software that will act as an intermediary between you and past guests, allowing you to keep in touch, set reminders, help manage appointments, follow up requests for reviews, and more.
Other technologies that can help give you an advantage over your competitors include using an AI like the Airbnb software discussed to handle your CRM, providing added online security for e-commerce businesses, integrating various software into one seamless operation, such as with a point-of-sale system and mobile ordering, and more.
Much like cost leadership as a strategy, cost-oriented thinking focuses on the production costs and emphasizes keeping those under control and lower than your competitors. Often, a reduction in staffing and equipment costs that impact overhead and expense costs are cut thin to allow a business to remain competitive compared with competitors. Tech can replace some of the staffing, especially in customer service, logistics, and sales processing, making it more cost-oriented as an operation.
A customer-oriented approach puts a priority on customer satisfaction and happiness with your business. The idea behind the strategy is to keep customers happy with the intent of creating repeat opportunities.
The thought behind that strategy is that it has been shown to be easier to sell to a repeat customer familiar with your products and offerings than to sell to a new one. For retail, a point-of-sale system that acts as a CRM for future offers and makes payment processing lightning quick are ways to focus on the customer experience that enhances the perception of the customer’s interaction with your business.
A customer-first strategy is illustrated best in the restaurant industry. In restaurants, repeat business is the lifeblood of the industry. Often, restaurants that do the best are ones where people enjoy their dishes but, more importantly, feel a connection to return to the establishment.