Thursday, October 10, 2013

As a Startup, Competing with the Establishment is Easier Than You Think

By Paul Chen

Yesterday, as I tried to extend my internet contract with Netia, a local Polish internet provider, I got charged twice for the transaction due to the fact that when I clicked on the "buy" icon, I was not shown a transaction complete screen.  Therefore, one might think that the transaction had not taken place.  So I tried again.  Nothing, again.  I was still getting internet from roll over.  It wasn't until this morning when I checked my email, I found out annoyingly that I had been charged twice.  As fellow customers, you can probably understand my frustration and anger over the SNAFU.  Polish businesses be it international or local have a reputation of being quite customer unfriendly.  You go to a supermarket in the US and your cashier smiles at you and thanks you and tells you to have a nice day.  Here in Poland that treatment is the exception not the rule.  Most of the time, the cashier puts your change on some tray, not in your hand, and throws the receipt somewhere beyond your reach.  As a tourist, you think it is a quaint custom, but as an expat, it is difficult to get used to.  It leads me to think, now, this is an area that startups can really make a difference.  

Startups often wonder how can they even compete with the major established firms.  Here in Poland, it is easier than ever.  To start off, you can really set yourself apart by providing good customer service.  One of the biggest differences between American customer service and Polish customer service is that in the US when the provider cannot do something they offer alternatives, but in Poland the provider just says they cannot do something outright.  As a result, the customer leaves annoyed and dissatisfied, and the provider misses out on additional possible revenue.   

One of the most difficult things to read as a Polish customer is a chart of offers, be it in a pizzeria or a internet provider.     You are never quite sure of what you are going to get and how much you have to pay.  I am convinced that they are trying to confuse their customers by playing some sorts of Jedi Mind Tricks.  They throw so many numbers and combinations of options, you can become very confused.  I believe simplicity is the best marketing tool.  Gimmicks are nice but overrated.  When you make it easy for the customer to understand what you have to offer and how much they have to pay, you save yourself a lot of headaches later on.   When the customer see the a clear advantage and benefit, you won't have to market as much.  

If you are a web-based company, make sure your payment infrastructure works.  It was incredibly aggravating to get charged twice all because the payment system was faulty.  Most American online retailers will give you a warning to only click once on the "buy" icon. 

One of the biggest advantage of being a startup is that you can pivot relatively easily, especially if you are using the Lean Startup methodology.  With the big boys, they have a bulky bureaucracy to deal with whenever they want to do something.  As a result, they are rather inflexible to major shifts in market trends.  However, as a startup the only person to get approval from is you , your partners and possibly your investor(s).  Consequently, you will benefit from the ease of adapting to that shift.  

One of the major weakness in the Polish market is that they are very stingy with their services.  A major example is the offers you get from the mobile service providers.  When you compare the prepaid packages and plans to similar ones in the western countries.  Startups can do even better due to the fact that they don't have to support the bulky extended empires that the big boys have.   They can offer more because they are more flexible with their profit margins.     If you offer just one more unit of product at the same price of the your competitor, people will choose you.  

So as startups, some might worry about being able to compete with the big boys.  However, the big boys should be worrying about how can they compete with you.  There are obviously many deficiencies in the more established "institutions" that a good startup can exploit.

No comments:

Post a Comment