Thursday, January 8, 2015

This place sucks

Operating a business without a clear picture of what’s happening in the marketplace, specifically with direct competitors, is like flying with blinders on. Running your business by looking your own data (cash receipts, web analytics, comment cards, your own online reviews) and no external reference is very similar to flying a plane into the clouds wearing foggles or glasses with the upper half of the lenses fogged out.  In today’s world, where so much information is publicly online, a smart, competitive intelligence strategy can be accomplished with a few keystrokes and no out-of-pocket expenses. Your only cost is the amount of time it takes to do the research.

 All businesses are engaged in a war to acquire customers. That war, however, has turned very bizarre with the advent of online reviews. Realizing the benefit that multiple five-star reviews can have on a business, common sense would dictate that every business would want to develop and deploy an online review strategy to maximize customer acquisition. Yet for many businesses, only the bare minimum is done: monitoring online review activity; if the business sells products online, then deploying a third party review solution; and in some cases, responding to negative reviews. Even worse, some businesses ignore the space entirely, confused and angered by this new platform that provides their customers with a means to broadcast their experiences, both positive and negative, to every existing and future customer. Consumers aren’t the only ones who can benefit from reviews. Businesses have the opportunity to get in front of their prospective customers at the point when they’re making purchase decisions.

 The importance of consumer opinions in consumers’ decisions of what to buy continues to grow. According to a survey of U.S consumers, close to 80 percent of the population consult online reviews before they make purchase decisions. Despite the growing importance of online reviews to revenue, many business owners choose to ignore this platform, creating massive market inefficiency. If business owners are willing to navigate the complexity of this space, that inefficiency can be converted to a significant gain.

The influence of online reviews expands beyond website commerce. National retailer Sephora, have launched mobile app to help consumers consult online reviews while in their physical stores. In fact, in addition to its mobile app, online review terminals appear in many of Sephora’s stores, where consumers can read cosmetic reviews supplied by other consumers to help them make informed purchase decisions. Now it’s time to take off your foggles and research your competitors, and, in doing so, gain a deep appreciation for some external reference points. A great business practice that you can start during this analysis is to constantly review and revise vision on what’s happening in the marketplace. As you read your competitors’ reviews, ask yourself if there are elements to your own vision that are lacking. Once completed, given everything you’ve read about the way consumers view your business and the way they review your competitors, ask yourself why someone would choose to visit your business versus your competitors. If you’re having trouble answering, it might be time to revisit your vision.

As philosopher George Santayana stated, “Those who cannot remember the past are condemned to repeat it.” That lesson is specifically applicable to this practice of online review competitive analysis. Along with analyzing your competitors who are thriving, you should think about doing a postmodern analysis on businesses in your sector that didn’t make it. Now ask yourself a question: what about my vision sets my business apart from everyone else in my field? If your answer is “nothing,” then it’s time to dream bigger. In my research on businesses, I have discovered that the owners are all incredibly passionate about the product or service that they present. The success to delivering on your passion is to make the end point of what you want your business to be as vivid as possible. If you’re a hotel proprietor, think about how your guests’ every concern is addressed even before they mention it, or how you’ve drawn guests out of their rooms to interact with staff so that they feel an emotional connection to your hotel. If you have a café, imagine who the customers feel as they’re greeted when they walk into your shop. What specifically keeps your customers coming back every morning on their way into office?  

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