How to Keep Your Customers When a Competitor Moves In

Prevent a drop in traffic and sales with these smart, proactive strategies.
When a competitor moves in down the street, highlight a customer-friendly atmosphere and well-trained staff to keep customers coming back. (Photo: MTaira/Shutterstock)

Except for the big brand store 6 miles west on a major highway, your store is the lone seller of the very popular Item X. But then a competitor moves in down the block and begins offering the same big-seller items. Soon you’re watching a parade of customers stream in and out the competitor’s doors and experiencing a dramatic dip in your store traffic and sales.

Business nightmare? Yes. But survival and success in such a scenario is possible. Here’s what to know and do before a competitor arrives.

Increase engagement to boost loyalty

Survival is all about being prepared long before a competitor opens its doors, said Bob Negen, a retail expert and founder of WhizBang Training, based in Michigan, which helps retail stores increase sales by providing excellent customer service.

“From the start of your business you need to build your customer base and customer engagement and keep building on that using various communication tools such as email and direct mail,” he said.

Being in touch with customers outside the store is vital to driving customer loyalty and commitment, which are invaluable when a competitor pops up.

“It’s like the boy-meets-girl scenario. A boy meets a girl, likes her, but if he doesn’t get her number he’s not going to be able to be proactive in seeing her again. He’ll have to just hope they meet again at some point. That’s not how a retailer wants the customer relationship to be,” Negen explained.

Related: 7 Ideas for Growing Your Customer Email List

Build trust

Negen, who was a retail store owner for 19 years, knows the competitor-moves-in scenario well and has been through it a dozen times.

“When a new store comes in there is always going to be a dip [in sales, traffic]. That’s just a natural occurrence as customers are always curious about a new store,” he said. But knowing your customers well and proving you can make them happy will bring them back to you.

“You need to build trust with your customer. They need to know that you know what they like and want and that is what will propel them into your store when there is a competitor offering the same product,” said Negen.

And don’t forget that finding ways to thank your most loyal customers is always smart.


It never hurts to find ways to thank loyal customers and remind them they are appreciated when a competing business shows up. (Photo: tomertu/Shutterstock)

Focus on the shopping experience

Creating an amazing in-store experience is as important as relationship building, said Negen. Customers who have a poor or frustrating shopping experience are more likely to seek another place to shop.

“Buying a product is just one part of the experience.” -Bob Negen

“Retailers need to provide an engaging experience by providing the right merchandise, having all the sizes of a product and having the best-selling products in stock,” he advised.

But it’s not just about having the right stuff. Train your staff well on customer service, think carefully about your return policy and consider hosting in-store events customers will love.

“If you provide a great fun and interesting experience, it will keep the customer in your store and coming back to your store,” said Negen.

Assess the new store — but don’t grab the pricing gun

“It’s good to stop in or have someone you trust assess the new store and do some undercover work and see what prices are, what’s being promoted,” Negen advised.

While lower prices are typically a “go to” for a new competitor battling a tenured retailer, don’t be lured into changing your prices in response.

“With small retailers, the biggest competition is yourself, your ability to executive at a high level. As long as you’re doing the best you can you will have loyal customers, and there are more important things to worry about,” he said.

“If you do the fundamentals of communicating, engaging and being responsive to your customer base, they will always come back to you because they know you, they like you and they trust you.”

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