How Entrepreneurs Can Take On The Big Players
Every business faces competition. Unless you’ve discovered a natural monopoly or developed a product that’s so out there that nobody else is making it, you’re going to have to outsmart your rivals.
Competition can be daunting, especially when you’re just starting out. Established players seem to have all the advantages: Their brand is more recognizable, economies of scale enable them to undercut your prices, and they can outspend you on marketing to stay top of mind with consumers.
But an agile small business can still go toe-to-toe with the big players in its field. Ancestry.com has 2 million subscribers and 11 billion historical records, but that didn’t stop Cliff Shaw from making a success of his genealogy company, Mocavo. Shaw didn’t try to take on Ancestry.com directly. Instead he developed a new model of doing genealogical research that proved complementary.
Small businesses also have their advantages over the big players. They can move quickly, they can more easily build personal connections with consumers, and they’re considered more trustworthy, too. Family-owned businesses are trusted by 80% of Americans, whereas only 52% of people trust public companies. To harness your entrepreneurial advantage, follow these three tips for taking on the big boys:
1. Focus on customer relationships.
Great customer service is the bedrock of a small business. Consumers today aren’t just interested in finding the best products. They want a first-class experience, and they’re willing to pay more to get it. Building brand loyalty through excellent customer service is more important than making a single sale, and long-term customer relationships are worth far more than that initial purchase.
Apparel companies, for example, have found that repeat customers spend 67% more in the third year of their relationship with a brand than they did in the first six months. Consumers today are also more likely than ever to recommend companies to friends or mention good experiences on social media. A 2017 survey found that 77% of people had shared their positive experiences with a brand, with 44% of them mentioning the great customer service they received.
Poor customer service costs American businesses around $83 billion every year. Don’t fall into that trap. Find your market niche and be open and communicative with your customers. Soon you’ll have a loyal cadre of ambassadors eager to sing your praises.
2. Be the best at one thing.
Amazon sells everything, but it didn’t start out that way. It began as an online bookstore, focusing on its core business for years before expanding to become one of the largest technology companies in the world. Small businesses and entrepreneurs, too, can hone their core function to create an advantage over corporate giants by specializing and becoming the best in their fields.
Specializing just makes sense. After all, a restaurant with a 10-page menu isn’t likely to do anything well, but one that focuses on a few specialties from a specific national cuisine will soon build a dedicated following. Take the products or services that your business does best and work to provide an even better offering. Cut loose the rest.
That said, don’t specialize roles right away. When it started a decade ago, Birchbox had only eight employees, who embraced a jack-of-all-trades mindset. As the company grew, its employees began to specialize. The company divided its operations into specialized functions and looked for experts as it recruited new team members.
3. Take a bang-for-the-buck approach to tech investments.
Don’t simply throw money at new technologies. Make sure your investments are geared toward providing a range of solutions, rather than only one or two. “Each IT investment should do more than fix an isolated problem or solve a single business need,” advises Colum Donahue of Genuity. “These investments should deliver greater output across product, sales, marketing, and the whole company.”
Lasting solutions are always better than short-term fixes. Invest in a series of complementary products that can give your business the platform it needs to succeed. A superfast internet connection is great, but if it’s not supported by a backup internet circuit, then your business could suffer during an outage.
New technology offers a world of opportunities to small businesses, but it needs to be approached wisely. A small investment in content intelligence, which uses analytics to identify and forecast which topics will matter most to your audience, can go a long way toward helping a small company take on its larger competitors.
Small businesses shouldn’t think like big companies. You need to harness the advantages that your agility offers you if you want to compete with the big players. Build lasting customer relationships, be the best in your field, and spend on tech wisely. Doing so will help keep you in business for a generation, instead of a year.
Learn more about how CenturyLink’s range of small business solutions that can help you compete with the big players.
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