Avoid falling into the catch-up trap

The catch-up trap is set by businesses that continually innovate and develop their products/services in new directions. These are forward-looking businesses that respond to feedback from their clients and develop their products in new and innovative directions.

This commitment to innovation and to implementing a programme of continuous product development and enhancement puts their competitors on the back foot.  All their competitors are left having to catch up.  Competitors rush to modify their products/services with “me-too” functionality – simply to neutralise all the unique new benefits these forward-looking businesses offer their clients.  They are left with no choice.

Unless they match the developments of their forward thinking competitor, the catch-up competitors will lose out on future sales with what will be seen as an inferior product/service.  As a small business owner, you simply must avoid having to continually catch up with an industry innovator.

One of the ways that small businesses can stand out from their competitors is to commit to continually develop and enhance their products in ways their clients and prospects find useful.  There is little benefit in developing a new element to a product’s capability if those who buy the product won’t be interested in it.  Become proactive in finding out what your market wants and in meeting this demand.

In general terms, this requires you to engage with your clients and prospects.  As with all communication, it works best if you can structure a two-way exchange of views.  Let clients and prospects tell you about developments in your products/services that they would like to see.  Find out why they include each item on their wish-list as you might even identify a fundamental shift in your target market that you had previously been unaware of.

How you gather this feedback will vary, depending on your industry.  In some cases, you might be able to engage with some form of independent User Group, created by your clients to exchange ideas, best practice and tips in getting the most out of your products.  It is always wise for suppliers to support any form of User Group that is created but not unduly influence it.

Engaging with clients and prospects using social media is increasingly common.  Use it to draw out their wishes for future functionality or increased scope for your services.  The openness of social media does mean it can give your competitors an early insight into your future development thoughts (if they are bothering to monitor your social media activity).

However you collect new ideas, you must introduce a mechanism to collate and prioritise them for your product/service enhancement programme – you won’t want to implement every idea (and probably couldn’t afford to do so).

Just as important as asking clients and prospects for their ideas to enhance your products/services is gathering their feedback on your own ideas.  There may be overseas markets that are more advanced than the one(s) you are currently addressing.  For example, it has always been the case that technology products available in the USA are ahead of those in the UK and Europe.  Although the “technology gap” has closed in recent years, it is always important for European technology suppliers to understand what is happening in the USA.

From this research, small business owners can suggest similar product/service enhancements to their existing clients.  Feedback will indicate the level of interest and this can influence the decision to invest in such enhancements.  Sometimes, your clients will see huge benefits from such enhancements even though they had never thought of the idea until you brought it to their attention.

If you find yourself in this position, put plans in place to urgently implement the required enhancements – before your competitors work out what’s happening.

It pays to become known as an innovator, a supplier that provides leading-edge, reliable and beneficial products/services.  You can stay at least one step ahead of your competitors by being the industry innovator.  This will convert into more sales and more clients.

Your competitors will be forced to imitate the same features you introduce simply to neutralise the competitive advantage these have given you.  After several cycles, the innovator (in this case, you) can claim to be the market leader as it can be shown all their competitors are simply copying their ideas and catching up with their innovations.

Of course, if you happen to be one of the competitors constantly catching up with an industry innovator, clients and prospects will soon see that you offer little innovation and creativity yourself.  You have become caught in the catch-up trap as you aspire to being a “me-too” supplier, copying the product enhancements previously introduced by the innovator.

This is not a good place to position your business.  Seize the initiative and out-innovate the innovators.

ACTION IDEAS

  1. Set up a mechanism to collate and prioritise possible enhancements to your product/service.
  2. Continually engage existing clients to find out how you can improve your operational performance and the scope of your products/services.
  3. Research similar overseas markets that you currently don’t sell into and identify ways to improve your product/service.  Get feedback on these ideas from your existing clients before implementing them.
Posted in Competitor / Market Knowledge