How Can Small Businesses Compete With Big Businesses?
The smaller the business, the more specific the target customer. This is your number one advantage. Big businesses cater to broad markets. Their customers typically favor price and convenience. Your customers, on the other hand, have much deeper values. Addressing these values through your marketing materials and customer experience shows that you understand your customers’ preferences better than your competitors.
To compete with big businesses, small businesses must know their target customer inside out, down to the very last detail.
What Does it Mean to Know Your Target Customer?
There are many ways to learn as much as possible about your target customer. Imagine your target customer walked into a party. What are they wearing? Who do they talk to? What do they talk about? A similar exercise envisions your target customer on a date. If you asked about their biggest problems in life, what would they say? Understanding their problems allows you to present your offerings and customer experience as solutions. While your larger competitors are merely helping people save time and money, you offer a series of emotional and psychological benefits. These exercises will ultimately reveal why your target customer would choose you over your larger competitor.
How Can You Attract Interest With a Small Marketing Budget?
Big businesses may advertise more aggressively than small businesses. But you don’t need a massive marketing budget to draw interest. You have to scrupulously tailor your ads to the preferences of your target customer. This includes your messaging. Have you ever wondered why so many businesses conduct focus groups? It’s because they want to hear their target customer describe their offerings in their own words. Small businesses can utilize a similar tactic by asking members of their target audience questions like “How would you describe this product?” or “What are the first words that come to mind when you see this product?”
The knowledge you’ve accumulated about your target audience can also show you which marketing channels to advertise on. Does your target customer prefer Facebook or Instagram? Do they prefer to read blog posts or watch YouTube videos? Remember, you don’t have to build a strong presence on every marketing channel. That’s what big businesses do because their customer base is so broad.
If you’re not sure which channel to focus on, look into online publications featuring articles written by entrepreneurs. Forbes, Inc., and Entrepreneur are full of articles from entrepreneurs who faced this exact dilemma not too long ago. Thus, their content might explain which marketing channels they’ve had the most success with.
What Makes an Unforgettable Customer Experience?
In addition to your ads, your target customer’s values should be reflected in your customer experience. If you own a brick-and-mortar business, you must give customers a reason to visit your location beyond purchasing a product. Once again, it’s time to revisit those tiny details about the target customer’s personality. Do they prefer warm weather? What kind of music do they like? Do they enjoy talking to strangers?
The ability to provide an in-store experience is another major advantage over big businesses. People buy from online retailers for convenience. And it’s safe to say large stores aren’t the most comforting environments. Every type of consumer has their reason for choosing a small business over a larger alternative. It’s your job to figure out what that is and make it the focal point of your customer experience.
Business Tip: Make it Easy for Customers to Pick Up Items
You may conclude that your target customer has a hectic, active lifestyle. Odds are, these customers are choosing your business over a larger competitor simply because it’s faster. Thus, you should create a customer experience that allows consumers to get in and out of your store as quickly as possible.
One way to accomplish this is by offering local pick up. To clarify, this refers to the ability to check your website to see if an item is in stock and then pick it up at your store. If it’s not in stock, the customer can tell your business to order it via your website and then pick it up when it’s ready.
Business Tip: Create Enhanced Experiences for Online Shoppers
When consumers shop these days, they aren’t just looking for the best products and services from businesses. What they’re looking for are the best buying experiences. A complete and competitive buyer experience will take all aspects of sales into account, from the resources customers use to find and compare new businesses to the emotions that drive online shoppers to become loyal customers. Focusing on touchpoints is one of these essential steps for small businesses that want to compete with Amazon. Those touchpoints can include social media, online ads, email messages, and e-commerce websites.
Getting your website up to standards should be a priority for improving the experience for your existing and potential customers. You can even employ a few sales tricks, such as creating a sense of urgency and turning setbacks into strengths, encouraging even the most casual browsers to complete purchases, and preventing the dreaded effects of cart abandonment.
Business Tip: Monitor Your Online Reputation
When you have fewer customers, you have to give each customer more attention. This is especially true when it comes to your online reputation. Big businesses don’t have to fret over negative reviews. On the other hand, small companies must respond to reviews that seem to come from credible sources, especially on social media.
However, simply Googling your company’s name won’t always bring up negative reviews. Instead, try Googling these terms:
[Your Company Name] Reviews
[Your Company Name] Scam
[Your Company Name] Complaints
Conducting these searches regularly is very important because Google is far from the only place people look for reviews. And since negative reviews are so common, small businesses aren’t necessarily judged for the number of negative reviews they attract. Instead, they are judged for the number of reviews they don’t respond to. For this reason, a business that responds to most of its negative reviews would likely be judged less harshly than a company with fewer, unacknowledged negative reviews.
Business Tip: Fully Staff Warehouses to Streamline Operations
If you own an eCommerce business, your operational processes play a significant role in your success. Amazon, for instance, has mastered the warehouse game by employing scores of people to keep each warehouse running efficiently around the clock.
Smaller businesses may not have the resources to staff their warehouses with full-time employees fully. What you can do, however, is hire temporary or part-time employees for particularly busy periods. Staffing agencies make it very easy to find temporary help. Working with them takes significantly less time than finding full-time employees. Plus, when you hire through a staffing agency, you won’t have the added stress and expense of processing payroll, which can save you valuable time in addition to extra costs.
Business Tip: Lower Shipping Rates or Offer Free Shipping
Another major factor in Amazon’s success is its ability to reduce shipping time and rates for customers. Many Amazon customers get their products shipped for free. The secret to Amazon’s shipping system, however, can be utilized by small businesses as well. Amazon keeps shipping costs low by using multiple carriers, which increases their control over costs and processing times.
Replicating this strategy ultimately allows you to take on more customers and attract more repeat sales. You can even offer free shipping by setting purchase limits for this option or including shipping costs in product prices. Amazon is far from the only Ecommerce giant that capitalizes on the latter tactic.
Business Tip: Offer Extensive Online Payment Options
If you want to set your eCommerce business apart from the competition, consider offering alternative payment methods that Amazon does not. One increasingly popular payment option is Afterpay. Unlike Amazon’s installment payment options, which are based on credit, payment methods like Afterpay allow customers to pay for purchases over time, with no interest and no credit check. This can boost each sale’s dollar amount while discouraging cart abandonment.
Business Tip: Emphasize What Makes You Difficult to Let Go
In some industries, high-quality offerings and memorable customer experiences will only bring short-term success. Your business model might need a specific element that makes customers more likely to come back. After all, many businesses failed because they couldn’t maintain a loyal customer base. They didn’t implement some features that dissuaded customers from reverting to a competitor.
For example, you might have an invoicing system that automatically renews a longtime customer’s order every month unless the customer manually cancels the order beforehand. Leaving for a competitor would require extra effort on the customer’s behalf, and that customer is already busy enough. Another example could be a loyalty program that rewards a certain number of purchases with a free one.
Business Tip: When They Don’t Come to You, Come to Them
New businesses often have a hard time attracting interest beyond their initial following. This doesn’t necessarily mean your offerings aren’t good enough to create new customers. Sometimes, it just means you have to come to them, rather than waiting for them to come to you.
For example, let’s say you own a brick-and-mortar café that has attracted a decent-sized customer base. One of your customers is having a big party this weekend, filled with people just like them. Thus, you could create a large order of items to serve at the party and expose your business to more target customers.
This concept can also be applied to digital strategies. The party idea arose because not enough people were coming to your store. Well, what if not enough people are coming to your website or social media pages? Rather than waiting for them to come to you, you can come to them by proliferating your content to their favorite online hangouts.
What If You Can’t Afford the Resources to Expand Your Base?
Finally, smaller businesses cannot ignore the capabilities of business loans. Far too many businesses view business loans as a “last resort” instead of a tool for growth. This article’s topic is the main reason business loans exist: to help small businesses stay competitive. For example, let’s say the previous section’s party idea turned out to be a major hit. Those guests can’t wait to serve your items at their next gatherings! But you don’t have the resources to create and deliver more of these large orders. This is the perfect scenario for a business loan.
In summary, remember that business loans are designed to maintain momentum, not to keep your lights on. If you have an opportunity to expand your customer base greatly, don’t pass it up because you’ve never even thought about a business loan.
Small Businesses Put the Customer First
As you can see, a recurring theme throughout these tips is putting the customer first. That’s how small businesses can compete with big businesses: by knowing and staying close to their target customer. Once you acquire the tools for achieving both objectives, your creativity will determine what happens next.