Marketing for small
business - taking on big competitors
Marketing for
small business can be a bit tricky when you decide to take on
large competitors. Small
businesses cannot afford as many mistakes, so marketing has to be
done
In
1998, there was no Google. But today, they dominate search
and have wiped out all but a few competitors. Going
up against the big boys can be done and often they have the
biggest weaknesses, but only if you understand your competitors
and HOW to do it.
Regardless of
the product/service, the big guys have several things going for
them:
1)
Time online to know what works and what doesn't
2)
They have a clientele that has experience with them, but
not with you.
3)
They already HAVE customers - you have to GET customers.
4)
A bigger marketing budget
5)
Name recognition - brand
6)
They can wait you out and play the price game if you start
it. If the only value
to your product is lower price, you have to be substantially
enough below their prices to get the business.
A 5% price difference probably isn't enough.
But can you afford to be 25% lower?
Entering a price war to go into business almost always
backfires unless you know your competition is completely bloated.
If they are, then you have to pound them fast and hard
before they have a chance to react.
They also
have several weaknesses:
1)
They are big and well-established which also means that
they are often slower to react.
They are comfortable in their success while you are eager.
2)
You can take customers away from them.
They cannot take them away from you.
In the beginning, your only direction is up.
Their only potential is down.
3)
You can build the underdog image.
4)
You know they exist. They
might not know you exist until you are climbing up their backside.
5)
Because of their established position, you have the unique
advantage of being able to learn from their mistakes.
They are blazing the trail which means that you can merely
look at what they are doing right/wrong, and improve on what they
have.
6)
They've been in business long enough to have alienated some
clients so a certain percent of their customers might turn over
easier if you can give them a reason to switch.
7)
Chances are their overhead costs are higher than yours.
This means they have to have a certain volume of business
at a certain profit in order to stay in business.
If business gets tight, expensive overhead that was
encumbered during good time can be enough to sink a company.
To go up
against these big guys, you must have an action plan.
Just going into business and hoping and advertising is not
enough. They can
outspend you. You
must:
1)
Differentiate yourself - If you offer the same things, at
the same prices, with the same customer service that the big guys
have, then there is no incentive for the customer to switch to
you. Yet competing on
price is a lousy game plan. You
must give them a valid reason (in their eyes) to do give you a
chance.
2) Start with a
piece of the action that they care the least to defend.
Everyone wants the big orders, and they will fight to keep
those customers. Many companies don't care as much about the onesie/twosies or
the small guy. So at
least go after those.
3)
Don’t forget about the fact that their single focus isn’t you.
It’s everyone. Though you may truly end up being a big thorn for them, when
you start out, they are not paying attention to you. They don’t know that you have launched your business and if
they do, they may acknowledge, but they are not concerned about
your presence.
