Everything seemed perfect at first as two friends John and Paul (not their real names) conceived an idea to start a cafe, where people could get refreshing snacks (scotch-egg, mince pie, sausage roll, toast bread) and coffee.
Like every young entrepreneur, they quickly started their idea pretty fast…. (No time to waste time, you know)
They paid for a shop. Got a sales girl and they were open for business. They did publicity every here online and offline.
Soon, they got people showing up in their business. Well, they have got little bit of premium pricing on their coffee and toast bread. The packaging was equally nice and worth it.
Everything went smooth. There was no competition, until one day….
I saw several people in a new location. Someone was selling a supposedly better toast bread now. I saw their packaging, very similar. It read “Haija Toast”. They gave premium service for half the price John and Paul’s cafe charged.
The toast bread was tempting, you wouldn’t resist it if you see it. Sardine, mix with a full egg, some tomatoes, and butter on both slices of the bread. It was so rich. And guess what? The price wasn’t 500 naira. It was measly cheap – 100 naira. And within 3days of being in operation, she stole the café’s customers, they started getting more customers… And in two weeks’, the Café was with barely 5 customers.
Haija’s strategy could be likened to how Opay packed out Gokada out of business in Lagos, Nigeria. They triggered the “greed” in humans and they gave more value and charged less than their competition. This was an amazing penetration strategy.
Remember what I said about customers being slutty? Yes. They are. They want the best value of every thing, so if they can’t get it from you at any point, and your competitors could give them, you may lose them.
Look at what your competitors are currently giving. Look at what your prospects are currently interested in. This doesn’t necessarily have to be price. It could be…
Better support. More guarantee. Free trial. Better products or services. Faster processes. Reliable customer services. Flexible pricing.
Focus on meeting your customers satisfaction. Focus on giving better value. You don’t have to compete on price. Customers are hardly convinced with prices. They want reliability, better products or services.
If Haija’s toast bread weren’t good, they wouldn’t continue buying.
Go to your draw table and start planning how to stack your products or services with better value than your competitors.