Toward the end of 2011 The Guardian Life Small Business Research Institute in the US gave its predictions for trends to cause the small business owner further grief in 2012.
The one that caught my eye was this:
Larger companies will aggressively market to prospects considered “too small” in the past. Larger companies with which small businesses compete will be more likely to “poach” customers they have traditionally considered to be outside of their target market segment.
And the Institute’s recommended course of action:
Look for ways to meaningfully differentiate. Small business owners should seek ways to demonstrate how their company is more responsive to customers or able to provide more customized, localized or cost-efficient service. They can also consider partnering with complementary businesses to offer a broader range of resources to customers that traditionally prefer dealing with larger companies.
Good advice but not just because of the economic climate of 2012: it is good advice for now and for ever. If, as a business, you are not differentiated from your competitors, no matter what their size, then why should a customer choose you over any other? The answer is likely to be price: and I would ask you to seriously consider whether you wish to be selected on price alone. I suppose if you are a luxury product and the most expensive you might be chosen for that reason but, for the most part, you would have to be the cheapest to win the prize i.e. a customer.
I realise it is tempting to drop your prices when all around you are dropping their’s. I was seduced once myself in a previous life and offered holidays to Asia for £399 but I soon came to my senses. Unless your processes and raison d’etre are built around being the cheapest (like the Pound shops in the UK) and you can sustain the model, my recommendation is: avoid being a bottom feeder.
You should aim to be so differentiated, that in fact you have no competitors. Ideally you should have created that persona from Day 1 but, if you didn’t, start now before it’s too late.
Image credit: nrossi1281