You may wonder how a small business can distinguish itself from major competitors? They act like PT Boats. While big companies duke it out among themselves, smaller companies can attack and take share. But not if they try to compete head on. For example, Wal-mart is taking on Amazon Prime with its own delivery subscription service. This service, launched September 15th, is called Walmart+ and costs $12.95 a month or $98 a year, compared to $119 for Amazon Prime. Both companies offer shipping advantages that are nearly impossible to compete against. Like PT-boats small businesses must compete in different ways. Because they are nimble, they are stealing part of customer demand that is not served by the larger companies. Those destroyers often cannot protect themselves against these attacks!
How Does A Small Business Distinguish Itself From Major Competitors?
PT boats cannot copy the major players and hope to succeed. Those players have mammoth budgets to market and discount in a way that has destroyed many smaller companies. So how does a small business distinguish itself? The secret lies in knowing your customers well and targeting their needs exactly.
PT Boats attack the destroyers where they are vulnerable. In services and with special products, in areas where Wal-mart and Amazon cannot or will not play. They use customer insights to develop tactics that enable them to fight smart, sometimes to even fight dirty. And to win!
Understand The Opportunity and the Demand
Often small business owners are relying on references and word of mouth to sell their products. They do not understand the demand for their product, they do not understand their customer or how to speak with them. This is a recipe for disaster. It is critical for you to understand this demand and how best to spark it. A small business can distinguish itself from major competitors only by knowing what customers want, why they want it and how to meet that need. The big businesses make generic offers that you cannot compete against.
Last Christmas, Hot Chocolate Bombs were all the rage. All the big stores were sold out by November and still the demand was strong. A few small companies used the opportunity to promote their product. One company created and sold a “do it yourself kit” that allowed customers to make it at home. Desperate to buy a “bomb” for my daughter, I made the order and received it in time to put it under the tree.
In this case, the opportunity was fleeting. The company had to act fast and identify the opportunity by intuition. It is even better if a small business can find an opportunity that it can sustain. If the offer is truly unique, the small business is able to distinguish itself from major competitors and to win in the long term. This starts with homework. Who is selling a product like yours? In what ways are you differentiated? How big is the marketplace? If big players have the product, what is their pricing strategy? You need the answers to thjese and other questions. It is a mistake to launch products and services and hope for the best. The number one reason why small businesses fail is that there is limited demand for their products or services. Get the answers, then you can launch with confidence.
If you act like a PT Boat, you won’t have to worry about the major competitors. The may not even notice what hit them.