It’s a rare occasion when visiting with a prospective client if they don’t bring up concerns about competing with the big boy companies. This is true in retail and service categories. Of course, the main issue always revolves around price. So is it possible for smaller companies to compete with the big boys? Short answer: YES!
Here are 3 keys for competing with the big boys:
1. Don’t Focus on Price
Competing on price makes the product or service a commodity game. Price will win if there are no other differentiators. Value is an over used word, but it simply means a customer perceiving a better solution. Changing your focus to product selection, expertise, and/or service provides big points of distinction and can represent true value. (You don’t have to have all three to compete.)
I have a client in the home improvement business. The company has to compete against big box stores like Lowe’s and Home Depot. Third-party surveys conducted at the end of each project often indicate that my client had the highest bid, yet they still got the business. Why? Because they gave the homeowners confidence with the premium product and service they provide.
Another client is a specialty shoe retailer licensee. Unfortunately for my client, the shoe manufacturer sells under the same brand name to retailers of all sizes. But, my client is winning because he offer’s a deeper selection of styles, sizes, and widths. He also has fit experts in the store. We have never advertised a sale in the 7 years he’s been open. (What retailer do you know that can say that?) The results? He has had consistent sales increases each year and has one of the highest profit margins among his peer group.
2. Recognize That Little Things Can Win The Battle
Recently, a screw came out of an expensive pair of sunglasses I own. Consequently, the lens fell out. I looked in the Yellow Pages for optical companies that mentioned frame repair. None of the chain names mentioned the service, but a local company did. I went to the local company. They fixed the glasses while I waited and didn’t charge me a dime. Guess where I’m going when I need glasses? Guess where I’m telling people to go when I hear them talking about needing eyewear or contacts?
I wrote in an earlier blog post of how a hotel employee went the extra mile and purchased a Diet Coke for my client when the catering division ran out. That simple action along with an overall customer-focused experience we had during our meeting have put them at the top of the list to host the next meeting.
3. Be A Better You
I was fortunate a few years ago to work on a consulting project with Randy Curtis, a former VP of Creative and Media at Wal-Mart. Randy’s advice to businesses that had to compete against Wal-Mart, or any big chain, was to “be a better you.”
It sounds simplistic, but the advice is right on. There are plenty of opportunities for smaller business to compete with big boys. The key is to focus on what you’re good at, find points of differentiation, and build relationships. Product depth, personalized service, and expertise are great places to start. Again, you don’t have to have all three stand out in the marketplace to compete with the big boys and grow your business.
The question becomes do you know who you are? Answer that question, stay focused on what you can control, and don’t worry about the big boys. You’ll sleep better and make more money.
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