How David (Small Businesses) Can Still Beat Goliath (Large Corporations)

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In the early 90’s, small businesses around the United States were going out of business right and left due to the Walmart’s, Target’s, Lowe’s and Home Depots of the world. Small businesses couldn’t compete with the automation and the ability to have bulk purchasing power of the big-box chains. Independent companies couldn’t compete on price or their marketing power. Consumers loved having the ability to shop at one store to find everything they needed in one trip verses searching five different stores. In a consumers mind, convenience is king! Companies like Walmart thrived in knowing that with a large purchasing power one-stop-shop model they can dominate the industry… and they did.

In the late 90’s and early 2000’s companies models shifted to have inventory on hand for bulk purchasing to start advertising the products and services and then creating an on-time delivery solution by putting their information on a website for you to click on and order. As technology has advanced over the past 10 years, there has been a shift from driving to your one stop shop retailer to one click shopping retailers. Companies like Amazon were developed for the ease and convenience of just clicking on a website and having it delivered to your doorstep 48 hours later. Again, convenience is king! This impacted the big-box retailers, sure, but impacted small businesses even more. There are constantly articles written about brick and mortar high inventory on hand businesses who are no longer here due to the convenience of the internet.  Today we are still seeing that issue with the Sears and Best Buy’s out there. The niche products that small businesses had the ability to sell that the Walmart’s couldn’t was now being under attack. You could find almost anything online.

Today there is now another shift that is not only putting small businesses in jeopardy; it’s also creating a culture shock to the big box retailers of the world and putting them on notice.  It’s called the local on demand economy. According to BIA Kelsey, “In the local on demand economy, demand comes first as consumers make their needs known. Supply, local service providers, then adjust accordingly. This creates more efficient customer acquisition – a critical factor for local service providers with small or non-existent budgets for upfront marketing. “

In laymen’s terms, technology has been created and adopted so quickly in the past few years it has finally caught up to independent agencies looking to create their own businesses. Small/Medium size businesses can’t keep up or don’t know of any solution to combat it and big-box companies are trying to adopt new strategies to gain market share.

Some large corporations are trying to figure out a way to think and feel like a small company when it comes to attracting new customers. Over the past few years, McDonald’s, for example, has positioned themselves from a fast-food chain to a hangout coffee shop vibe (ala Starbucks) that also sells fast food. In May of 2015 they announced that they are taking the initial steps to reset and re-package their business as a “modern progressive burger company.” They are trying to re-brand themselves in efforts to downplay the size of their company to relate more with a local and authentic vibe. Their biggest competition is the companies who are adopting mobile apps to have food delivered to someone’s house. The Freaky-Fast-Freaky-Good Jimmy John’s marketing campaign is being adopted by companies as their sole business strategy. Let’s connect consumers with the ability to choose from 30 restaurants to have food delivered to their household as opposed to spending 30 minutes driving to a fast food place and back. Let’s have these companies sign up with our SERVICE where we can give the consumers a convenient way to demand an affordable delivery strategy to get their food.

Local On Demand Economies connect supply and demand in real time with leaner marketing strategies. Think of the pizza industry. I think most people will agree that a local pizza shop delivers and serves WAY better pizza than the Domino’s, Papa Johns and Little Caesar’s of the world. But why is Domino’s pizza gaining 2-3% growth every quarter in sales? It’s because they are taking their advertising and marketing dollars away from telling you how great their pizza is and turning it into how CONVENIENT it is to purchase from them? If you want a pizza, you just click or text or even TWEET and YOUR usual pizza can be delivered to you at a moments noticed. And by the way, that 2-3% gain every quarter is in the MILLIONS of dollars of which are taking away from your local pizza shop and/or putting them out of business!

Think about the transportation industry. For years the only way to get around was driving in your car yourself or hiring a car service to go to the airport. The only way to really find those companies was to look in your local phone directory or search online to find a company. Do to the rapid change and affordability in technology start-ups like UBER come on to the scene and have destroyed the local transportation industry. Now you can download an app and find hundreds of INDIVIDUALS who have signed up to be your personal chauffer. The transportation scene and local cab companies haven’t been able to keep up with the rapid change and are signing up with UBER just to stay busy during the times they can’t get their own fares. They are taking it a step further and now offering a delivery service SMB’s can take advantage of to deliver your flowers, meals, or other items to your doorstep!

And then there’s the biggest tech giant out there Amazon who is constantly trying to add services to their convenience model. They are no longer just your click and deliver shopping center now. They are starting to build out an entire Amazon Home Services line so you no longer have to go to your local directory or even Google to find someone. Soon while you’re shopping for lawn and garden items you’ll get a popup asking if you’d like to hire an Amazon approved/certified technician install that item you’re looking for.  Buying a paintbrush and roller and having it delivered to your house? Why not just click over here and find a reasonably priced handyman or painter to do that job for you so you can get back to your everyday life.

We are in a world of convenience. Everything has been adopted this way due to the constant pressures of work and family life while fitting everything else in a 24-hour day schedule. Due to this we’ve created the local on demand economy and the biggest nightmare is small-medium size business either have no clue that it’s coming, or they have no clue how to make it work for them. It’s almost impossible to beat a company like Amazon’s marketing power, so how does the SMB’s distinguish themselves. Well let’s look at a few things to remember:

• You can take the UBER model and become a subcontractor of these companies. Identify certain characteristics that increases both sides of the business, but take diligent notes on what people enjoy or disagree with their service and adopt the “best of both” in your own business.
• Recognize that a larger business is not necessarily your competition. Recognize that you have the ability to be stronger in ways that they cannot. Larger staff, larger budgets, larger audience base, larger loss means that decisions take longer and are likely to be risk averse. You are more nimble and have the opportunity to change and adapt to trends, customer requests and can connect on a personal level that large corporations cannot. SMB’s can take risks because the agility means they can circumvent obstacles, change direction, reboot plans and respond quickly to adversity.
• Remember that customer service is key. Companies like Comcast and others constantly have negative reviews based on the customer service to their subscribers. Writing personal letters to your customers, dealing with charities in person and listening to the youth demographic can greatly improve your business. The value of an individual customer is always greater for a small business than for large corporations. Oftentimes to cut expenses, the first thing to go for major companies is quality and service. That dramatically impacts how it deals with their clients in the CUSTOMER SERVICE aspect of the business. But if you’re a small business they take responsibility and fix the issue as best as they can without making you fill out some form or call some department that only takes calls between the hours of 9-5.
• The PULSE of a business can be felt more in a SMB vs. these major companies. When a customer makes a purchase (and returns), vendors make proposals, competitors make changes etc. you feel it more in a small business than a large corporation just updating their inventory list. This is a unique quality trait that you have a small business.
• Find companies you can partner up with to guide you through the difficult times and hopefully find ways to keep you front of mind or provide a service that can update your technology to make you have the feeling like the larger companies. There are new websites that can be developed, mobile apps that can be created, and customer relationship management systems that can be integrated that brings your nimble SMB into a fighting chance.

I work with over 200 businesses each year in the Chicagoland area on their marketing and advertising. Some companies have a large budget and some are on the smaller scale. You can find ways to market yourself in anything that you do but the truly smart business owners know what they don’t know and CAN ADMIT IT. These business owners hire agencies or individuals whose sole job is to find clever ways to market to new customers and existing. A SMB needs to have a pulse on their company outside of the day-to-day life. Here are some questions you should ask yourself:

• When’s the last time you took the effort to view all of the listings associated with your company to make sure they are all correct? To show up on Search Engines a listing on all these websites is paramount and if they are not correct, it will damage your ability to show up on search engines like Google
• The “I see myself on Google when I search my name” response is what I hear the most from my businesses. But I remind them that it’s great if you want to be only found for your current client base, that’s fine. But if you type in generic searches like Plumbers Chicago vs. Bill’s Plumbing Chicago you’ll find a completely different result. And if most people who are looking for a plumber search for Plumbers Chicago (according to Google research tools) you’re missing out on a lot of potential business and having your current client base find you.
• When’s’ the last time you sat down and researched all of the reviews about your business. I’m not just talking Yelp. I’m speaking for Google, Yahoo, Bing, Dexknows.com, YP.com, Better Business Bureau, and all of the websites out there that show your name and number that also has the ability to have consumers write about you. My “slogan” I’ve adopted with my clients is that you’re going to either manage your reviews, or your reviews are going to manage you.
• What’s the new way people are getting their marketing message across? Is Facebook still viable or are they moving to other mediums? Should I be marketing on smartphones?
• How can you get your best cost per LEAD vs. just showing up? Is what I’m doing now even working?

The local on demand economy is here. We all see it and know it and we all participate in it in some way or another right now. Remember that your existing client today is your competitors new client tomorrow. Make sure they continually know who you are, and keep the pulse on your market so you can adapt to the changes. The questions that a SMB should be how do I fight them when they have such a large marketing/advertising budget and who can I trust to get me there, and how can I quantify those  efforts/results.