Small business owners are divided when it comes to what they want for their business. While some dream of becoming huge companies one day, others would like to stay small and cozy. Thanks to advancements in technology and changes in the small business online marketing scene, it is now possible to find a safe middle ground - your business can stay at a comfortable size while going head to head with large, multinational corporations.
Sounds unreal, right? Maybe if you asked that question decades ago, the answer would be yes. However, it’s possible to outcompete large businesses because technological advancements have leveled the playing field, helping small businesses survive longer. Studies show that around 80% of new small businesses survive their first year, and over 50% survive after their first five years. So, what are the current strong points of small businesses and how can they leverage these to gain an advantage over industry giants?
Competing against the big guns has always been hardest on sellers or retailers before eCommerce marketing stepped in. If you’re a small business selling goods or products, you couldn’t hope to compete with larger, more popular competitors. For the most part, small-time sellers were supposed to be content with having a small, loyal customer base, which is made up of people in the seller’s direct community.
Nowadays, small-time sellers can go toe-to-toe with large businesses. They don't have to limit their sights in their immediate neighborhood. Thanks to online selling, small businesses can take their goods online and sell globally without much tech knowledge and capital.
If you have a small boutique and business is stagnant, you can create an online shop. You can start selling your wares to people outside your original target market. You can start delivering goods to people on the other side of the globe. And if creating your online store feels like a huge step, you can start by selling goods over online selling platforms like Amazon and eBay. Online platforms don’t discriminate so your goods will be showcased alongside other sellers big or small.
This brings another worry to small-time sellers: What if I get more customers? How can I keep up with the demand? Again, modern advancements in online selling have made it easier to sell goods from the comfort of your own home. Before, you had to keep your stock in your physical store. If you had a lot of products, you need to rent additional storage space. If you’re worried about keeping up with the demands of your customers, you can simply dropship your items straight from manufacturers. Dropshipping means you take the orders from your customers, then transfer the orders to the manufacturers or distributors, who will ship the item for you.
Small businesses and startups tend to thrive better nowadays compared to large corporations. This is because technology has made it possible to get your company off the ground and maintain it in terms of finances. Companies are now being started and operated from the comfort of one’s living room. According to the Small Business Administration, microbusinesses (businesses with just 1-2 employees) can get started with just $3,000 in capital.
Most of the large businesses you see today are products of the old way of commerce. Sure, they have huge earnings and a large customer base, but they also have a lot of expenses. You see, businesses built on the old, traditional model required a physical location and on-site employees. This meant companies had to pay rent, utility bills and employee salaries monthly, on top of a plethora of other expenses. Nowadays, business owners start with nothing more than a laptop and a basic website. This setup is not only possible with service professionals but even retail as well!
This doesn’t mean that you don’t need money to start your business. You will incur expenses like website hosting costs, software purchases, and online marketing costs, but it’s nothing compared to what businesses pay for each month. Do you know what the best thing about it is? Because of modern advancements, you can stay small and keep your expenses low. However, it doesn’t mean you can’t earn as much as the big boys.
Reputation is a huge deal when it comes to businesses, and you’ve seen businesses suffer huge losses because one of its managers was charged with sexual assault, or a particular store mistreated one of their customers. This is the power of social media - if it’s caught on video, it’ll spread like wildfire. Netizens of today are passionate about social justice. They’ll spread the word around and sooner or later they’ll call for the termination of your errant employee or worse, they’ll call for a boycott of the entire company.
With big businesses, it’s hard to keep tabs on all your employees if you don’t know what they do outside work hours. This isn’t a problem for small businesses. If you are a sole proprietorship, you only have to watch out for yourself. If it’s just you and a couple of other employees, it’s still manageable.
It’s easier for small businesses to earn a customer’s trust. For one, small businesses can provide that warm, personal customer service that big businesses can’t pull off. Imagine if every time you called customer service to complain or make an inquiry, you get a different person each time. It’s hard to develop a good relationship with customers this way.
On the other hand, how would customers feel if every time they gave you a call or an email, the same person answers? It would create a sense of closeness, especially if the other person remembers you as a customer. This is how small businesses gain the trust of their loyal customers.
Usually, when a small business finds success, it’s a double-edged sword. On the bright side, they earn more and they gain more consumers. However, this means they need to invest more money into hiring more people, get better machines, expand to a new location, etc. This is when companies lose their identity as a small business, which for some owners is good news.
However, as we mentioned before, there’s nothing wrong with staying small, if it means you can compete with big businesses. As your business grows, you might find it hard to stay small. However, this doesn’t necessarily mean you should hire new people or get new machines.
Small businesses nowadays can keep up with increasing workloads thanks to outsourcing. It costs less compared to hiring full-time employees and you can save on equipment and other related expenses. Need someone to come in once a week to do your books? Hire someone by the hour to do it for you. Need an assistant to help you answer emails and manage documents? Outsource one.
Aside from outsourcing, you can cut down on manual and routine work with the help of Artificial Intelligence. Small businesses are known for their personalized customer service. However, if your customer base is growing, you might find it difficult to reply to every inquiry that comes your way. Use AI to your advantage - install chatbots on your website to deliver prompt answers to inquiries. Automate your emails so your response rate remains the same. Of course, this doesn’t take the place of human interaction, but it does help when someone emails you at 2 am while you’re in bed.
The biggest reason why small businesses can now outcompete big businesses is that the marketing industry has changed a lot in recent years. A few decades ago, only huge and stable businesses can afford marketing campaigns complete with paid actors and the best film crew money can buy. Playing ads in the most coveted timeslots can cost a business around $100,000 and above. A print ad can cost up to $20,000 for a national magazine. How can a small business compete with that?
Today, small businesses aren't limited to physical banners, streamers and the constant shoutout on the local radio station. Small business online marketing has made it possible for the little guy to compete with big businesses and even overtake them if you play your cards right.
How is this possible? Well, digital marketing is like regular marketing, except it is done online. Instead of showing ads on TV or the newspaper, your ads are shown on social media and search engines. Even $2 can come a long way if you know how to target your consumers.
But isn’t this just another playground where big businesses can take advantage? True, big businesses are all about online marketing. Big businesses invest a lot of money into search engine optimization and paid ads, but the difference is that the online world doesn’t discriminate. For example, if big businesses pay thousands of dollars trying to beautify their website, your website can show up first on search engine results if it feels like your website is more relevant to the searcher’s needs.
So how do you know what’s relevant to your consumers? Through data science of course. Data science is powered by AI and is constantly collecting and organizing data, which includes what customers want and what they’re currently feeling. This data collection is automated, so you don’t even need to have an entire agency to help you with your small business marketing needs.
With data science, you can check what you’re doing right and what you’re doing wrong. If you have a website, data science can tell you what’s driving people away from it. Does the data say consumers stay on your website for 10 seconds before leaving? Maybe it’s because the pages load slowly. Do they keep visiting your items but don't purchase them? Maybe your prices are expensive, or there’s something wrong with the online checkout funnel.
So go ahead, small business owners, and use data science to your advantage. Figure out what you’re doing wrong and improve on it. While you’re at it, check out what your larger competitors are doing wrong and show ‘em how it’s done.