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Differentiating from the competition

6:33 pm on Jun 17, 2007 (gmt 0)

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Hi all,

Just a quick post as I am really in need of some inspiration. Sales this month are way down and I can't seem to put my finger on why. I am still getting some decent traffic through adwords. Todays spend is at 7.50 and has yielded 3 sales. In January this produced about 20 sales. I know its silly to compare 2 different months, but up to the end of yesterday I am down about 400 on last June.

I'm hoping this downturn is some kind of blip, but I've never seen anything like this. Recently a competitor has been actively pushing their business. My widgets sell for 10, theres are 8 with a 2 delivery charge. A lot of the bigger names in this field sell there widgets for 15 and a lot charge delivery. I ahve always tried to stay somewhere in the middle, offering great prices and a matching service.

But sales are really down and it is starting to worry me that they will just continue to go down. These new guys bid their way to the top of every adwords campaign and this has really affected bids as everyone else has now bid higher to maintain their posistions.

I'm really looking for some inspiration to drive some sales. If people are looking solely on price then I don't think I am willing to compete. I have to offer a good level of service which I do and others apparently don't (Googling the new guys reveals a few bad comments about them to say the least)

Can anyone make some suggetions as to what I can do to drive sales back up again?


8:56 am on June 18, 2007 (gmt 0)

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If you can still cut your bottom line then you can think of offering more value added services to draw in more customers.
11:34 am on June 18, 2007 (gmt 0)

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Of course, this colud be just a seasonal down. We usually do most of our business in autumn and winter, less in spring and very little in sommer.

If your service is great, it works for you in a long-term perspective, playing for client's loyalty and retention. I do not think if you can differentiate on a basis of good service. Certainly, it helps you to retain existing customers, but how do you attract new ones? Everybody can claim good service, but very few actualy do it. So, we have a chicken-and-egg problem here.

So, you can try to use cross-promotion, up-selling, down-selling etc. (look at [webmasterworld.com...]

I always thought that differentiating keeping prices down is a bad idea--you land having a lot of work and a little of money, unless you are a big capital backed fish.

To start to differentiate, you have to know your customer better.

You can differentiate basing on your customer segment -- say, some customers might need special delivery or payment terms, because are living in country and do not have credit cards (or do not have Internet :-), or are young and need peer-recognition basing of their cooliness.

Then, you could try to sell your product from a different angle (sell home fish tanks as a biochemical laboratory equipment :-)

Or you can define all the features of your product and classify in order how they affect customer's decision to buy.

It might turn out that some features playing a big role, and other do not at all. Then write the important featues in bold and make them a theme in your AsWords :-)

[edited by: Morgenhund at 11:40 am (utc) on June 18, 2007]

9:55 pm on June 23, 2007 (gmt 0)

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Since I don't know what type of widget you sell, it's hard to give specific advice. But here's what I do to help bring in some traffic and repeating sales.

1. Make sure you are giving your customers a way to opt-in to a newsletter that offers discount coupons, etc.

2. Give the customer incentive to sign up for the newsletter. For example, I offer a free sample PLUS an entry into a monthly prize drawing for the customers that sign up for the newsletter. The customer must still be on the newsletter subscription list when I draw the name in order to be eligible to win. PS - This is a great way to get rid of excess inventory that isn't moving, too!

3. Go to a few freebie/sweepstakes forums and list your offer. You will be AMAZED at the traffic it brings. Don't expect to get any sales from this....that comes later. Freebie posters will find the freebie and will go to other forums to post it. So all it takes is a few posts and your offer will be on many forums!

4. Once or twice a month, email your newsletter with coupon codes, special deals, etc. If you have already done the drawing for the past monthly contest, post the winner's name. This will encourage most customers to continue to receive your newsletter.

I'm not guaranteeing you will reap tons of sales from this technique, but it least it will keep your site in the minds of your visitors!

Many people are "window shoppers" by nature. They want the best quality goods at the best price they can find. If they found your site 2 months ago but decided at the time not to purchase, do they still remember your site? Probably not! But sending a newsletter with special offers may make them decide to give you a try the next time they need your "widget"!

10:11 pm on June 24, 2007 (gmt 0)

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I had a problem like this with AdWords, because the prices on the phrases I thought were pertinent to my biz were too high on account of the competition. So I tried something different--a really, really tight focus in my ads.

I chose some products that I did not list well with in the results but where I knew darn well I had a superior widget. In terms of some of these widgets, there was a known issue, for instance, an ongoing discussion about their ingredients. So I tried to refer to these issues in the ad itself in order to demonstrate my familiarity with the widget's background. That showed customers that I was somewhat of an expert compared to the other merchants. Expertise makes a person seem more trustworthy also, I think.

Anyway, it is working. My clickthrough rate has gone up a LOT and the clickthroughs are producing sales--not huge, because these items appeal to a small group of folks, but sales nevertheless. I wish I had done this a long time ago, but I kept thinking that I should care about the same keywords that my competitors cared about, because weren't they the important ones? Right.

The other issue was the price competition thing. Most of my prices were like yours, in the middle. I was askeered to raise them higher. Then one day I was packing widgets and sighing with boredom and realized that I could make the same money from selling 15 fancypants widgets @$20/ea as from 150 just plain widgets @$2.00/ea. I might have fewer sales with the fancypants widgets, but the costs would be less not only overall but proportionally (fewer per/sale fees because of fewer sales). So I am moving in that direction, and it has been a good decision so far. Scary, but good. It is hard to have faith in yourself and to know that there are customers out there for your fancypants widgets. It feels like jumping off the edge of the world, and in a way, I guess it is.

7:50 am on June 25, 2007 (gmt 0)

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If people are looking solely on price then I don't think I am willing to compete. I have to offer a good level of service which I do and others apparently don't

price is only one factor when shoppers buy things online - it will only ever be one of many factors - it will never be the one and only factor

a much bigger factor is how easy it is for people to give you their money - people will pay a bit more if it means not having to jump through hoops to give you their money

so if you've covered the essentials (good pricing, easy-to-use website, credit card payments rather than only paypal etc) then people won't have any problems giving you their money

that is when it's time to look at the other possible causes of low sales ....

[edited by: RailMan at 7:56 am (utc) on June 25, 2007]