Would you tip a car dealer $2,000 for the privilege of buying a new car from them? Given a choice, would you keep the tip in your pocket and buy the same car online delivered to your door, ready to drive?
Tesla skipped the dealer model and sells direct to the consumer. Now Ford is looking at its higher cost of advertising and distribution ($2,000) per vehicle compared to Tesla and considering how they might go direct to the consumer too.
Cars aren't the only purchase being remade in the image of Amazon. Eyeglass frames that once cost hundreds of dollars can be purchased for as little as $19 online. Have your prescription handy, enter the data, and your new eyeglasses will be at your door in a couple of days. A brief list of industries being turned inside out by competitors sporting new business models includes prescription medicines, orthodontics, hearing aids, and mental health counseling.
There is no safe business model in a world where an upstart like Quip can transform buying a toothbrush with an innovative online business model.
Here are five strategies to use to combat customer poaching by low-cost online competitors:
1. Listen to customers by joining a social media group focused on your product or service
There is a group for almost every product or service. Want to know what drives your customers nuts? This is where to learn.
2. Create a blended business model featuring more choices
How many different ways can you get what you do into the hands of more people? Target’s mixed-use of their brick and mortar stores is a great example. Order online, pick up your order at the store or wait for delivery. Not happy with what you ordered, use the store for your return.
3. Create online options for in-person experiences
Does your customer really need to call? A chat feature might give some customers an option they’d like better, or maybe a chatbot to answer common questions 24/7.
4. Focus on the customer's experience
Walk through every step in your customer’s journey. Where are the speedbumps? Where do you lose them? See yourself through their eyes, and if you can’t do that on your own, just ask them what works and what needs improved.
5. Stay connected long after the sale
No one is anyone’s customer anymore. “Your” customer is being bombarded by ads and content from competitors down the street and across the globe. Losing touch after the sale is a great way to lose a customer.
Here's something to think about if you're not sure you're up to tackling those five strategies - no matter how difficult or expensive those changes might be now, losing a chunk of customers will make them much harder or perhaps even impossible to accomplish.