Multibillion-dollar legacy industries don’t make it easy for entrepreneurs to step in and create value. There are huge barriers to entry – licensing, pricing, regulations, and cultural/brand significance – that come with being around for a century or more.
However, those barriers shouldn’t stop you from innovating.
Take the utility sector for example, which is perhaps most frightening of all: A trillion-dollar taxpayer subsidized network of poles and wires set up through franchised municipal monopolies. Otherwise known as, our power and energy industry. It’s a mouthful of protection, and as a result, utilities make for a great investment (just ask Warren Buffet), since the likelihood of disruption is tough to even think about. To most reasonable entrepreneurs, the regulated utility sector, similar to the financial and healthcare industries, is tantamount to a “NO TRESPASSING” sign.
But, that is exactly what makes the effort so worthwhile. If you can successfully work with or alongside a monolith industry and produce value, instead of being focused on “disruption,” you’ll be able to achieve massive results.
When we first started trying to provide consumers cleaner and better energy options, getting to market proved difficult as we were trying to break into a utility-customer relationship (paying a power bill) that hasn’t really changed for the last half-century. But, with a clear mission in mind and the understanding that we would have to work in unison with utility providers, we were able to start making our mark.
Here are a few tips for getting your foot in the door:
1Create value, not disruption
There are some industries where the Silicon Valley catchphrase “disruption” falls flat. Some industries just aren’t meant to be disrupted in the way that people in the tech community are used to. Nearly our entire economy depends on the power grid and we couldn’t come in and totally upheave that. When you’re going after a big industry, you first need to provide value to the customer or the provider.
Show instead of tell that you have a strong customer base and that people need what you’re offering. And build relationships – working together with the big players in the space will get you much faster and better results for your company and your customers.
2Focus on the customer experience
When you’re a startup, you already have the advantage of being years ahead in your digital experience compared to traditional companies in your space. Own that and hone in on it to make it the best customer experience possible. We looked across sectors to bring modern design, UX and data elements to the home energy experience.
Traditional companies aren’t necessarily thinking that way, and you’ll win people over by offering self-service customer tools, easy payment options and notifications they actually understand. Good communication with your customers goes a long way.
3Start small, build toward the vision
A lot of start-ups begin with very lofty goals – disrupting whole industries and changing the entire way a process is done. We certainly had a broad vision to be the trusted home energy advisor for everything from solar to batteries. But, you’ll never be able to achieve anything if you try to tackle everything all at once in a highly regulated and old-fashioned industry. Instead, to get started, focus on one thing.
For us, it was offering clean energy via renewable energy certificates (REC). By starting small, you’ll be able to learn about and understand the space you’re going into, and will be able to see if there’s a market for what you’re offering. As you learn, you can slowly expand step by step and tackle more complex products in the industry.
4Use best practices from other innovative industries.
No industry has a monopoly on good ideas, and the boom in direct-to-consumer brands across apparel, food, finance and healthcare provides a great roadmap for how to build a modern customer experience. Look to other industries that have been there and done it. For example, Mint.com has created an innovation through the consumer interface – in their case to manage finances – while leaving the existing banking and credit card infrastructure in place.
While the thought of breaking into an established industry is definitely intimidating, in today’s entrepreneurial environment it is definitely possible and innovation is desperately needed. Success depends on the ability to shed your typical idea of disruption, and stay patient and persistent.
This article was originally posted here on Entrepreneur.com.
Who Are Your Real Competitors?
Do you know who your real competitors are, and why they’re winning business you could get?
When entrepreneurs talk about their competitors, the talk is usually disparaging rather than admiring. The competitor gives bad service, they cheat, they only get business because of bribes or political connections, they deliver inferior products and do not pay taxes to reduce their prices. We seldom hear that their technology is great, their service levels enviable and their legendary efficiency allows them to sell at great prices. Yet many competitors must be as good or better than you; they are making sales while competing with you.
We want to see ourselves as better than our competitors, so we focus on their faults. Instead, rather develop your own value proposition, one that really does offer something special and preferably unique to the market. Then see how your value proposition stacks up against theirs. Doing this can be a sobering experience, you may find that you are not the greatest after all.
You then have the opportunity of improving your products, customer service, pricing, communications and customer relations to become competitive.
So far, I have talked about traditional competitors selling similar products and solutions to yours. Prof. Michael Porter produced a neat model, the Five Forces of Competitive Position, showing that aside from traditional competitors there were competitive forces in the power of buyers, the power of suppliers, the threat of new entrants and the threat of substitutes.
In many industries the buyer-seller relationship is a very unequal one, especially if the buyer is a large organisation and the supplier is an SME. The buyer may allocate delivery slots, dictate pricing and terms and generally be in a position to give advantage to certain suppliers and make life difficult for others. Equally, where the supplier is extremely powerful they may dictate to their resellers.
Typically, the franchisor or supplier tells you how and where you may trade, forbids you to sell other goods and influences your pricing. In both these cases the imbalance of power means the rules may change adversely at any time.
Related: Competitor Analysis Example
The really serious competitive threats are of new entrants and substitutes, and these two threats are sometimes combined. Large local and international operations looking for growth could see the sector you occupy as an attractive opportunity. New disruptive technologies can change the rules and immediately capture large shares of the market. We may think that these trends will not affect our SME but there are numerous examples to show that is not true.
Simple ‘mom’s taxi’ school transport operations have been badly affected by Uber in wealthier areas. Precision engineers find themselves in hot competition with nerds equipped with 3D printers, legal and medical advice is dispensed online and even long-standing NGOs find themselves in competition with international apps. No one is immune from all the changes coming.
It’s a good idea to figure out a competitive strategy in advance. Business conditions are tough, and competitors will do everything in their power to take business away from you. Research and make notes about current competitors. Look for the things they boast about, their unique values, their strengths and weaknesses.
Place them on a position map so you can see which competitors are strong on experience, which boast about technology or customer service, and what type of customers they have. Then work out where you want to be seen in comparison to them. What do you have to do or fix to get to that position? Look for new technologies and trends that could affect your industry.
Examine big international players operating in the same product space in other parts of the world, and keep an eye on their expansion plans. Update your product and customer strategies to cater for what you have found. This is actually easy; almost everything is available on the Internet. The hard part is making your company less vulnerable to competitors.
How Excellent Customer Service Affects Your Business’ Bottom Line
Business owners say great customer service is important. In fact, it’s so important it can make or break your bottom line. Here’s how to make it work for you.
Business owners say great customer service is important. In fact, it’s so important it can make or break your bottom line. Learning how this works will help you make improvements to your customer service that will bring more in to your business.
Why Customer Service Matters So Much
Bizness Apps says there are several reasons why your customer service matter so much, including:
- This is how your customers remember you. Having a positive reputation is great, but customers tend to remember negative customer interactions more. Research shows that you’ll need 12 positive experiences to make up for one bad one.
- Your customer service says a lot about your business. Customers often base the quality of your product on this interaction. This is why you should spend as much time and money on your customer service as you do on your products or services.
- Customers want to feel like you care about them. By playing to their emotions and treating them with genuine courtesy and respect, they’re far more likely to invest their faith in your business. Pause for just a moment to think about how they pay your bills and that should help you genuinely appreciate them.
- Good customer service honestly makes everyone’s lives easier. When it’s easy for your customers to contact you, it’s also easier for them to buy your products or services. This is why you should add contact forms and a FAQ page on your website and include customer service tools in your custom-built app. While offering other forms of contact are great, you don’t want to make it impossible to find your phone number.
- Offering great customer service is a profitable marketing strategy. Word-of-mouth marketing does more than most A+ marketing teams can. Start by getting your customers raving about your company’s customer satisfaction standards then include customer testimonials and happiness ratings to show potential customers how much you’re there for them. When you tap into this and have your customers start your praises of their own accord, you’re tapping into a gold mine.
- Don’t undervalue customer service because your clients always have alternatives available. It’s relatively easy for them to go to a competitor who’s offering them what you’re not. In fact, studies show that about 78% of consumers have backed out of transactions or failed to make an intended purchase simply because they received sub-par customer service. In today’s global marketplace, businesses that don’t have the tools to make it easier for their customers to do business with them get left behind.
- Maintaining your customer base will cost you significantly less money than you’ll spend trying to attract new customers. Loyal customers are typically worth as much as ten times more than their first purchase. However, you won’t cash in here if you don’t prioritise customer success. If you’re wondering what the value here is personally for your company, stop and consider the money, time, and other investments you place in onboarding new clients. You’re guaranteed to save in all these areas by having your clients stick around.
- While it’s important to drive traffic to your business, if you can’t transform this traffic into leads then the sales really aren’t much use. This requires a careful balancing act that you’ll grow better at as time goes on.
To Improve Your Customer Service, Choose the Right Phone System for you and Your Customers
Forbes says a cloud-based phone system helps with improving communication. In many cases this will help fix any problems you’ll experience in providing great customer service because now you can also provide over-the-internet support services. This is beneficial for your customers in several ways, including:
- Maintaining consistency in customer interactions and minimising the number of touch-points or different contacts that are involved in each customer’s interaction with your company will improve both their satisfaction and their loyalty because fewer transitions between customer service providers means there’s fewer opportunities for an error to occur. Not only is this something research shows, but the same research also shows that each touchpoint in your customer chain must be held accountable for the end result of your customer’s interaction with your business.
- You need to simplify and clarify any support text that’s on your website. If you can’t do this, they you should get rid of it altogether. These small changes can help your customers help themselves so they won’t send in as many support requests. If you choose to get rid of your support text altogether, make sure you instruct your customers to email you for help. This may make it easier for you to keep track of your customers’ issues so you make changes that eliminate them in the future.
- Listen to what’s being said about you on social media then respond appropriately. Every complaint or concern that’s raised online is an opportunity for you to win over additional customers while also solving your customer’s problem and increasing their satisfaction and loyalty.
- Show your customers that you always put them first by checking with them throughout the onboarding process. Sending an email or a handwritten note expressing your appreciation goes a long way.
Forbes continues on to say you never know when a complication with your product or service may arise. When it does you’ll want to work quickly to solve your customer’s problem. Even if they simply don’t understand how to use your product or service, it’s still up to you to fix this issue. Unfortunately, there isn’t always a simple solution available. Many times, you can fix it by offering exceptional over-the-phone or over-the-internet support though.
One Last Thing…
While you may feel like there’s a lot of information here to remember, Talkdesk says the most important thing to remember about this topic is it’s really hard to make up for a bad customer experience. Sure, we all make mistakes, but when it comes to customer support you really can’t afford to make them. Remember, it’ll take 12 good experiences for your business to make up for one lousy experience, which means you could lose out on a lot of money.
How You Can Over-Deliver To Gain The Advantage
Go over and above for the people you serve, and you will enjoy the benefits of an abundant relationship.
Wise, established entrepreneurs know that over-delivering value — which simply means going above and beyond for the people we serve to deliver more satisfaction for our service and thus exceed expectations — is crucial to a business’s survival, growth and future. It represents the core of a company’s foundation. And without a solid foundation, a business is always vulnerable to a person or company that does over-deliver.
To ensure you don’t ever forget the importance of over-delivering value, here are three ways it will give you and your company a distinct competitive advantage:
1. Creates abundance
Success comes most to those who are surrounded by people who want their success to continue. When you over-deliver value, people may be sceptical at first, thinking that you are expecting something in return, but when you are consistent and genuine with your intentions, they begin to trust and appreciate that you are just thinking of them.
You never know the value of the value you are delivering. But I’ve learnt that if you are consistently delivering greater value to people, your value becomes more and more aligned with the immediate needs of the people and companies you are serving — and abundance in the relationship is created. This is what over-delivering value is all about.
2. Earns respect
Entrepreneurs who take the time to over-deliver value are the ones who earn respect. Typically early-stage entrepreneurs tend to find ways to be the recipient of someone else’s value in a search for momentum.
You never know which transactional seed is going to grow, but when adding value to others, this type of seed is never forgotten.
For example, every quarter, I deliver a white paper to clients with the intention to challenge their thinking. My goal is for them to know that regardless of whether I am conducting business with them or not, I am thinking of them and thus strengthening our long-term relationship. And since my white papers focus on predicting future leadership trends and business strategies, when a related topic arises in one of their strategy meetings, they don’t hesitate to call me to discuss an opportunity for us to engage.
3. Enables distinction
Entrepreneurs who add value to others create and sustain a distinction in the minds and hearts of those they are serving. After all, most people are simply doing what they’re told to do inside the box they are given. Entrepreneurs can’t afford to do that.
We are the originators, the innovators and the opportunity seekers. We live our lives constantly in search of ways to add value to make things better. We disrupt the status quo. We are not in the business of fixing the old ways of doing things. We create new ways of doing things. If entrepreneurs are technically the experts at adding value through our products, services and brands, why can’t we add value through the people we depend upon most for our success?
Over-delivering value is the key not only to being a successful entrepreneur but also to the entrepreneurial mindset we must continually cultivate in ourselves and others. No one is successful alone. We must see the value in over-delivering value by being other-directed and connecting dots of opportunity with focus and purpose to become smarter and wiser, while making ourselves invaluable to the people and businesses we serve.
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