Many small business owners and managers I’ve met over my career have an inferiority complex. They view large businesses – with their well-known brand, sophisticated marketing, and seemingly unlimited resources – as their superior in every way. That’s a natural initial feeling when you’re competing against a giant. Nobody was betting money on David when he faced Goliath. But I’ve seen firsthand that small businesses have advantages they can exploit to give the big boys a run for their money.
It’s hard to compete against a local presence. A large company can have the most beautiful website and slickest literature, but those tactics pale in comparison to the small business owner running into a customer at the grocery store, a high school basketball game, or a church picnic. People buy from people they know and trust. If you are engaged in your community, you will have stronger relationships with customers and prospects.
There’s also significant value in your control of the “last mile.” I was in a meeting recently that included a mix of owners of small-to-medium sized businesses (SMBs) and their national vendor partners. The SMBs were worried about the impact of Amazon and Google on their industry, wondering aloud if they would be put out of business. A large vendor spoke up and said, “You’ll need to make changes, but those companies don’t have the desire or the ability to control the ‘last mile.’ That’s the most important part of the relationship, and you own it. You just have to take advantage of owning that.”
And in the middle of writing this article, I received a call from an executive at an international software company who called his network of regionally-based dealers his “local heroes.”
I have yet to meet a person who loves automated phone attendants. You call in hoping for a quick answer but instead are greeted with the message “please listen closely as our options have changed.” I’ve talked with business owners who installed an automated phone system to make them look bigger than they are, but I recommend they scrap that way of thinking. One successful SMB I talked with said prospects have told them they won their business because “you were the only company who actually answered the phone.”
Large companies struggle with how to make a personal connection with prospects and customers. Their marketing departments install e-mail programs, dive into data analysis, and purchase lists in hopes of making a connection. An SMB I work with doesn’t do any of that. Yes, he’s built up an e-mail list over time, but he told me his most effective marketing technique is baking for his customers. It’s a new hobby he picked up, and he’s happy to share that with his customers. He’s also an avid guitar player and occasionally spends evenings entertaining the patrons of his restaurant customers.
When a customer wants an answer, the SMB doesn’t need to pull together several departments across different time zones before responding. A locally-based bank in the city where I live emphasizes that point in their marketing efforts. Their slogan (which they promote everywhere) is “The Hometown Bank with the Hometown Touch.” Their website says they process mortgages faster because “all decisions are made locally. At other financial institutions, these same processes often are centralized out of town which slows down the process considerably.”
Employees at small businesses should naturally be more empowered to make decisions because they work in close proximity to the owner and live the mission of the company daily. SMB owners who engage with customers and prospects have an additional advantage. Someone once explained it to me as “king-to-king” conversations. Business owners prefer to talk with other business owners; they don’t want to talk to a “rep.”
I experienced that firsthand when I started my own business. I was in my 20s, so when I walked in the door wearing my suit, tie, and too much hair gel (give me a break – it was the 90s), the prospect expected that I was a newly hired sales rep. When I gave them my business card that said “Owner” underneath my name, their demeanor changed immediately. We could have deeper business-to-business conversations because they viewed me as an equal, not just someone trying to hit my quota.
Fewer Rules to Break
Customers are crazy about customization, and small businesses are able to provide that. They don’t have a bureaucracy or ironclad standard operating procedure to adhere to. A small business I’ve been consulting with for a few months provides stellar customer service. When I asked the owner what his secret was, he quickly responded, “We break our rules if the client needs us to.”
That attitude would have helped United Airlines avoid a situation that recently generated an avalanche of bad press for them. The short version of the story is that United overbooked a flight and the company rules said that if no one volunteered to take a different flight, the company would force some passengers off the plane. Nobody imagined the airline would resort to physical force, dragging a passenger and bloodying his face, but they did. A small business would have worked with their customers to resolve the situation amicably.
While these advantages exist for small companies, the key is relentless execution of them. SMB managers need to establish and promote company principles and install internal systems that will help them maximize these advantages. Establishing systems have always been tricky for SMBs due to their lack of resources, but the good news is that business management software and automation tools have become both very affordable and designed for your niche market.
Combine those tools with the advantages inherent to small businesses, and you’ll give yourself the ability to run with the big boys.
Jim Roddy is a Small Business Advisor for Vantiv’s PaymentsEdge Advisory Services. He assists business owners and entrepreneurs with their recruiting, hiring, employee management, leadership development, customer satisfaction, succession planning, and more. Prior to joining Vantiv, he was President of B2B publisher Jameson Publishing for 11 years and launched his own startup. Jim is regularly requested to speak at small business conferences and he is author of “Hire Like You Just Beat Cancer,” a book featuring hiring lessons, interview best practices, and recruiting strategies for managers through the perspective of a cancer-surviving executive. Follow him on Twitter at @Jim_Roddy.