Having to compete with huge businesses blessed with far greater wealth and buying power, higher profile, unimaginable marketing budgets and armies of people may seem daunting. But size isn’t everything, according to Alasdair Inglis of small-business marketing consultancy Grow. In fact, being small can provide competitive advantage, he argues.
“Speak to small-business owners and you’ll find they believe they can compete – and many are winning the battle,” he reveals. “Smaller firms can be more agile. They can make decisions more rapidly. They can create, test and launch new products quicker. Just look at the new businesses that are disrupting various markets, out-flanking much larger organisations.”
Matter of trust
Crowdfunding and other solutions can mean lack of finance no longer restricts smaller businesses, says Inglis, which can also access the talent they need as and when required. “Small businesses now have an incredible opportunity to compete thanks to the ease and low cost of online marketing and selling. Some people running small businesses know as much about online selling and using social media as those working in top London agencies.
“There’s an energy and creativity among UK entrepreneurs and small businesses. People buy into that. Often consumers trust small businesses more than some large companies, who aren’t as close to their customers. Many consumers prefer to buy from small, independent businesses.”
Customer focused
Ian Corbett describes his Caversham-based business, Goldcrest Travel, as a “tiny independent travel agency that doesn’t use social media, has an embarrassingly bad website and has never advertised in its 16-year history”. However, he adds: “We’re highly successful.”
This is no mean feat, with less than a fifth of UK holidaymakers (pdf) now booking overseas holidays in person at high street travel agencies, compared to about 60 per cent ten years ago. Names such as Thomas Cook, Kuoni and Thomson dominate high street market share, so how does Corbett succeed? “Our holidays cannot be booked online nor by larger high-street agencies relying on information popping up on their computer screens,” he replies. “Our bookings are complex, tailor-made, multi-centre trips guided by years of experience. Others don’t get as excited about such things as we do,” he smiles.
As Corbett stresses, his business is fiercely independent. “We’re very careful when choosing tour operators. We’re swayed by their knowledge and commitment to quality. They’re small independent specialists like us, and specialising is a key reason for our success. Another is we’re extremely customer focused. We’re driven by wanting to give our customers a wonderful holiday experience every time. Our customers recommend us to their friends and family – which proves that we must be doing most things right.”
Quality and consistency
Based near Bath on a 1,000-acre organic dairy farm, Marshfield Farm Ice Cream was set up almost 30 years ago. At full capacity, enough ice cream to fill 31 bathtubs can be produced every hour. Now sold in more than 3,500 independent outlets, award-winning ice cream in 25 flavours is made within a converted cowshed from fresh organic milk produced onsite by Marshfield’s 250-strong dairy herd.
So, how does the business compete against market heavyweights such as Walls, Ben & Jerry’s and Häagen Dazs? “We don’t compete head on,” concedes founder Will Hawking, who co-owns Marshfield with his wife, Dawn. “They have higher brand profile, their products are popular, their distribution channels are well established and they have huge budgets.”
Hawking says Marshfield’s success largely comes from finding its own niche. “You must try to be number one within your own small part of the market. Quality and consistency are fundamental, while remaining competitive on price.” Smaller businesses can also tailor their offering to their local market and foster closer relationships with customers, he adds. “Despite our increasingly globalised, online world – people still buy from people,” he stresses.
“If you offer quality at the right price, many consumers prefer to buy from smaller businesses. We’ve invested heavily in our equipment and products to ensure quality. Using organic milk has been another important factor. And what we say is what we do. People can even visit us in the summer to see our ice cream being made. Authenticity can carry you a long way.”
Personal touch
James Vincent’s family has lived in the picturesque Wiltshire market town of Bradford on Avon for five generations. After the original hardware shop (with origins dating back to 1856) closed in August 2013, Vincent reopened the business as J Alex Brown some months later.
With business partner Matthew Webb, Vincent also co-owns Avonfield Gardens garden centre in nearby Hilperton. “Why us rather than the large DIY and hardware chains? Firstly, we’re well known and trusted. Customers know they’ll get no-nonsense advice and the right solution.
“If a customer needs something that’s not widely available, we’ll still try to order it for them. In large shops sometimes, the attitude is ‘if you can’t see it on the shelf, you can’t have it’. Our suppliers can sell us single items – we’re not confined by having to buy in bulk.”
Vincent doesn’t accept that small firms can’t compete with large businesses on price highlighting that often large businesses don’t pass the savings they receive from buying in bulk to the customer. “With a lot of everyday stuff we’re cheaper, because we pass on discounts while maintaining our margins. And we offer a wider range of branded products – we’re not confined to selling what we’re sent by some buyer somewhere.”
Vincent also believes that honesty is the best policy. “A supplier might let us down occasionally, but if you’re honest and explain to customers, you retain their trust. As soon as a customer walks in, there’s eye contact. We greet everyone and we’re attentive without being intrusive. We’re here to help them. I’ll even drop stuff off for free on my way home in my car, if it helps them. We offer a very friendly and personal service – the way things used to be.”
Authenticity and passion
So, what final words of advice does marketing expert Inglis offer to small businesses seeking to beat large competitors? “Don’t try to imitate them,” he replies. “Be who you are, be authentic – be different. Have a story that connects with customers – always stay close to them. Have a world-class brand, too, because being small is no excuse for being unprofessional.”
Inglis says it’s impossible to overstate the importance of having a friendly and personal approach to your customers. “Large businesses spend a fortune on training trying to emulate this, it’s where you can really set yourself apart. Show customers that you care. And never lose your passion. It’s why many people start their own business in the first place and often the thing that customers like best about small businesses.”
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