Ask SCORE

A Monthly Column of Information for Small Business

Q: Large businesses have all the advantages—economies of scale, pricing power and more. How can a small business like mine compete?

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A: Consolidation in many industries has decreased competition and often worsened customer experiences. Most customers feel larger organizations offer less personal service. Capitalize on your small size (and flexibility) to win those customers.

First, know your customers better than your competitors do. Even in industries with large, dominant players, small businesses succeed every day by knowing who their customers are and what they want. As a small business, you can forge deeper relationships with your customers and learn what truly matters to them. Technology is your friend. Small business has great tools for managing and understanding customers. Customer relationship management (CRM) systems are inexpensive and will often give you as much power and functionality as the multi-million dollar systems used by large companies.

Second, make customer experiences truly personal. Once you know your customers, use that to create richer, more personalized experiences. Personalization is more than sending a birthday coupon or using the customer’s name in an email; effective personalization uses customer preferences to create a customized experience. It does not have to be elaborate. Auto shops ask, “Do you need a loaner?” That could be: “I know you prefer a loaner, Mr. Smith; would you like me to reserve one?” Personal touches make customers feel like valued guests.

Third, rapid response is your secret weapon. Shortening the feedback loop, the time from contact to response, is one of the easiest ways to differentiate your customer experience from big companies. How fast you respond to customer issues and how well you ensure both the issue and its cause are resolved can go a long way towards creating a great customer experience.

Fourth, bend where big business breaks. Large companies box in their subsidiaries with policies and procedures created by legal and other departments hundreds of miles away. These rules are often driven by other factors than the customer experience. They don’t allow for rules to be put aside for the benefit of the customer. You can. Make sure you know which processes and policies are ironclad and which can be bent or adapted. Use the nimbleness of your size to your advantage. When you can, make exceptions, circumvent processes, and override policies to make each customer experience exceptional.

Fifth, empower your staff to win customers. Once you embrace flexibility, do so as an organization. Empower all your employees to be flexible, not just supervisors and managers. Allow your employees to solve as many problems in real-time as possible. Establish rules, don’t let budget concerns prevent flexibility. Make sure your people do not have to fill out three reports to solve a simple service issue. Empowerment keeps five-dollar problems from escalating into five hundred dollar problems.

Don’t let your small size impede you: use it as an asset. Even the smallest business can win.

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SCORE offers free small business counseling and low cost workshops. Call SCORE today at (831) 621-3735 or visit santacruzscore.org