Think you can't compete with the big guys? Think again. You probably have advantages that you haven't even considered.
By Linda Formichelli
Rachel Weingarten was scared. As president of the 15-employee GTK Marketing Group in New York, she was bidding against some of the biggest marketing firms in the industry to win an account with an environmentally conscious company. Weingarten’s competitors had large proposals printed on pricy paper. She had a four-page proposal held together with tongue-in-cheek “environmentally friendly” twist ties.
After handing over their exquisite proposals, each of the big marketing firms did an elaborate song and dance about its concern for the environment. Then it was Weingarten’s turn. “I stood and said, ‘We came in with a four-page proposal because we’re committed to saving trees,’” Weingarten says. “‘These people all came in their private planes. Their presentations are destroying the environment. What will happen when they get the project?’” Weingarten won the account.
Weingarten knows that her firm’s competitive advantage stems from how small it is, because it allows for creativity, flexibility and cost effectiveness. “Our bigger competitors are so mired in the corporate world that it would cost them millions to do what we can do on a shoestring,” she says.
Your small business has competitive advantages that you may have overlooked. Consider these tips to determine what you can offer your customers that others can’t—and then tell the world through a marketing campaign that demonstrates your true strengths.
Competitive Advantage: You Lack Red Tape
When your corporate competition discovers a hot new product or service, it has to go through proper channels—meaning that by the time the new product or service is finally given the green light, it’s not so hot anymore. In a small business, however, the owner can make a snap decision and run with it. “I can make purchasing decisions on the spot,” says Stephanie Chandler, owner of the three-employee Book Lovers Bookstore in Sacramento, Calif., and author of The Business Startup Checklist and Planning Guide: Seize Your Entrepreneurial Dreams!. “I had a candle vendor come in, and within 5 minutes I had a deal with him to sell his candles.”
To discover what you can offer that your larger competitors can’t, “Put yourself in the mind of the CEO of your biggest competitor and ask, ‘What won’t I do—because that’s not the way we do things, or because it might damage another part of my business?’ You might see an opportunity,” says Kaihan Krippendorff, author of The Art of the Advantage and an instructor of courses on entrepreneurship at Florida International University in Miami.
Competitive Advantage: You’re Convenient
Sure, the big-box store may offer what you offer—and at a lower cost, too. But when it comes to buying a 50-cent widget at the local store, or driving to a strip mall to get that same widget for 40 cents, most consumers would opt for convenience, says Ron Cook, professor of entrepreneurship, director of the Small Business Institute and of the Center for Entrepreneurial Studies at Rider University in Lawrenceville, N.J.
Take BELLA Main Street Market, a small grocer in Baker City, Ore. “I’m the only person who does what I do in a large area—about a third of the state,” says owner Beverly Calder. When the price of gas goes up, the convenience of your company may become a bigger customer draw than ever before, so be sure to highlight this advantage in your marketing.
Competitive Advantage: You Offer Personalized Service
In the minds of many consumers, big companies equal long lines, voicemail tag and impersonal service. “We deal with a lot of the big guys, and it’s hilarious to get put through to seven or eight assistants before you get an answer,” Weingarten says. But small businesses are like “Cheers,” she says, where everybody knows your name. “A lot of what small businesses sell is themselves,” Cook adds.
Chandler’s staff knows the store’s regulars by name, and she and her staff always take the time to chat with customers. “I joke that I’m the bartender at the bookstore,” Chandler says. “We get a lot of feedback that way; we just expanded the store hours based on that feedback. Our customers are very open about what they like and don’t like.” To make this advantage work for you, think of ways you can make your customers feel special, whether it’s a card on their birthdays or a suggestion box.
Competitive Advantage: You Have Products the Big Guys Don’t
Chandler offers books by local authors that aren’t available at book chains. Calder sells specialty relishes, preserves and mustards, as well as natural meats that come from farms fewer than 12 miles away. Small businesses can offer products and services that customers want, but aren’t cost effective for big companies to carry.
“Regardless of how expensive your product is, there’s a subset of people who will care passionately about what you offer and will pay a premium,” Krippendorff says. “What can you offer that your competitors can’t? Identify the people who are willing to buy that, and communicate your message to them.”
Competitive Advantage: You’re in Love with Your Customers
Your customers aren’t just numbers and profit charts; you know who they are; you understand what they need; and you’ll bend over backward to make them happy. “I don’t take on a client if I don’t believe in their project,” Weingarten says. “If you have a passion for the project, more often than not, a client would rather see that than 500 employees. They’re in love with their product and want to know that you are, too.”
Chandler loves her customers so much that if she can’t get them what they need, she’ll order it for them from an online retailer. “Fifty percent of my customer base is retirees and a lot of them aren’t computer savvy,” she says. “I charge a small fee, but it’s something I do for goodwill.”
Competitive Advantage: You Support Your Community
As a small business, you stay close to your roots and become part of your community. And when you do things to support that community, potential customers find out about it through word-of-mouth. Calder, for example, sets aside 3 percent of her sales for programs such as the local women’s shelter. “Every business gets hit up for donations, and I turn it into a challenge,” she says. “I say, ‘I’ll donate $100 to your cause, and if you can find five other downtown merchants to give you $100, I’ll double it.’ Kids tell their parents about it and it makes the community realize we’re all in this together.”
You can garner the same word-of-mouth by supporting local causes that you care about. Find a cause that your business can contribute to by visiting volunteermatch.org. The competition can admire your efforts, but it won’t be able to duplicate them!