U.S. president Herbert Hoover once said that competition “is not only the basis of protection to the consumer, but is the incentive to progress.” While most companies understand that competition is a necessary part of a free-market economy, competing against larger, more established brands can still be frustrating and intimidating.
Time and time again, however, small businesses have shown that niche brands can be just as successful as their larger counterparts through differentiation and adaptability.
While you may not be a Fortune 500 corporate giant with a multimillion dollar marketing budget, there are business practices you can implement to ensure your brand survives for the long haul. Here are four ways your small business can compete against large competitors.
1. Be Agile, Nimble and Quick
Unlike large corporations, small companies can often refine and reshape their business model to respond to fast-moving markets. For example, a local clothing retailer may be able to quickly create products to capitalize on fashion trends or quickly pull inventory based on declining demand and underperforming styles.
As Harvard Business Review authors Martin Reeves and Mike Deimler point out, a dominant market position and first-order production and delivery capabilities are no longer the only factors that guarantee a sustainable competitive advantage. “Those that thrive are quick to read and act on signals of change. They have worked out how to experiment rapidly, frequently and economically—not only with products and services but also with business models, processes and strategies,” remark Reeves and Deimler.
Yes, big businesses will have the advantage of size and scale. But they can’t respond swiftly to market trends because of internal red tape and bureaucracy. “A well-tuned small business can easily outperform its larger counterparts in customer service, trend identification, product output and quantity control,” states Henry Elkus, chief operating officer and director of philanthropy at Unlimited Ltd. Clothing.
2. Differentiate and Innovate
“As a new firm, you’ll need to do something better, cheaper, faster or amazingly different in a way that won’t put you directly in the crosshairs of a big, powerful company,” says University of Chicago professor James Schrager. The way that a small startup can accomplish this, says Schrager, is by creating a product or service that’s different and unique in its own way.
In this context, agility is the ability of a small business to be innovative in a marketplace that needs solutions that address consumers’ wants and desires. Besides encouraging your own team to constantly experiment and collaborate around new ideas, you can draw from your own well of passion to foster what is commonly referred to as a “culture of innovation.”
3. Polish Your Web Presence With a Stellar SEO Strategy
Back in the early days of search engine optimization (SEO), the more inbound links and keywords you peppered throughout a webpage, the greater the likelihood web visitors would see your page at the top of search engine results pages (SERPs). As you’ve probably learned, the days of keyword stuffing are over. Your SEO strategy must focus on creating high-quality content that users can understand and share.
Furthermore, your website is your online calling card and a place where your brand can really shine. In addition to boosting SEO by targeting niche and local audiences through sites like Yelp, founder and CEO of AudienceBloom Jayson DeMers advises small businesses to take advantage of long-tail keyword strategies to boost SERP rankings for less popular keywords.
Similar to creating content around a smaller, more focused group of topics, “With long-tail keywords, you’ll be sacrificing minimal ranking potential with highly popular keywords for maximum ranking potential with less popular keywords,” states DeMers. This means swapping out shorter phrases with longer ones that are less popular but increase your ranking potential on major search engines.
4. Celebrate (and Listen to) Your Customer Base
As the popular mantra goes, cultivating customer relationships is paramount to attracting new customers and retaining existing ones. But in an age where internet technologies like social media are transforming the customer’s role from passive user to active participant, marketing techniques such as crowdsourcing are increasingly being used to further envelop customers into the product-development process.
Harvard Business School professor Carliss Baldwin tells business owners that, when it comes to turning to customers for innovative ideas, “Accept the reality that they collectively know more than you do about whatever it is your company makes, that technology has almost completely democratized the design process, and that these user-innovators, thanks to the internet, can go through an iterative process much more quickly and cheaply than was true in the past.”
Hence, it pays to profile your customers. Find out what makes them tick, what gets them excited and what their expectations are, especially when it comes to customer care and service delivery. In addition to offering niche products and services that stand out from those offered by larger brands, keep in touch with clients through surveys and post-sale questionnaires. Surveying client feedback and tailoring your product offering to meet changing client tastes will bring you one step closer to building a strong and fiercely loyal customer base.
If you want to learn more, here are five simple tips to boost profits by improving customer retention.