Tweet

Competition in Tough Times

Written by: Will Atkinson

Article Overview: How are small retailers supposed to compete against the big boys, especially in the current economic climate? Small retailers have several advantages, from obvious things like lower fixed costs, to intangible assets like customer service and name recognition. Refinining your position in every aspect of your business can make a huge difference to your bottom line, and how you support it.

Competition in Tough Times

So, everyone reads the news, and everyone knows it's tough out there. How can a small retailer compete with Wal-Mart, Lowe's, etc. when times are so tough for everyone?

The obvious answer is price. Sure, the lowest price makes a difference, but don't believe for a second that it's the only variable out there that will make customers want to to business with you. Furthermore, by definition, having the lowest price won't build customer loyalty. A customer that came to you (or Wal-Mart or Costco) for the lowest price will just as readily go down the street for a lower one, so don't get caught up in that game.

First, you have to assess the price you charge versus the cost you pay. Recessions are always a great time to shop your business around to make sure you're paying the lowest price to your vendors that you can. Maybe you can get a better price from a new vendor, or a vendor that's trying to break into the market. This is an easy way to reduce your costs, meaning you can reduce your price without hurting your margins.

Second, take a reality check and decide what fripperies and luxuries you and your staff can do without. This is another easy way to reduce your overhead, allowing you to run your business successfully on less revenue. However, make sure you aren't cutting revenue producing line items!

Third, make the most of your staff, your location, and your existing customer base. You opened your store because you love that line of business, and you've come to be an expert in your market. Make sure your customers know this. Have free open houses and workshops where you can show customers a good time, giving them a tangible benefit. At the same time, you're reinforcing to them that you're not just an order taker, but you're a valuable resource and a subject matter expert. The next time they think about the product or service that you offer, chances are that they'll naturally think of you too! How powerful is that?

Finally, now that you're the neighborhood expert, make sure that you have the goods and services on hand to satisfy your customers' needs WHEN THEY COME TO YOU, rather than when it's convenient for you. This is the key to customer service. Sure, you need to be nice to them, but understanding their needs, sympathizing with the customer, and always being able to help them and satisfy their wants will build customer loyalty that a slightly better price at a cold, faceless superstore won't overcome.

Take the time to search out small details that will build this value for your customers and you can go a long way toward recession proofing your business.

Related Articles
  Downturns and Guerrillas
  Making Money in an Economic Downturn
  Competition Is Not Healthy
  Kick the Competition to the Curb & Sell Like Crazy
  Marketing in a recession can really help your small business

Article Tags: costco, customer base, customer loyalty, game, good time, great time, line of business, lowe s, luxuries, margins, neighborhood, open houses, order taker, recessions, subject matter expert, tangible benefit, wal mart



Related Forum Posts
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
Does a New Company need a "Big" PR firm? - I've started work with a brand new company that is going to do loss mitigation. My boss intends to hire a "big" PR firm - ie one that costs a lot of money - because he wants press releases sent out to the New York Times, the LA Times - all the major papers around the country - and he think they'll be more likely to print them if they come from a "big" firm as opposed to a one-person PR firm. I think it doesn't matter where the press release comes from as long as its well written. What are the opinions here?
Re: Does a New Company need a "Big" PR firm? - [quote="OmnivoreInk":dmj1i0sv]I've started work with a brand new company that is going to do loss mitigation. My boss intends to hire a "big" PR firm - ie one that costs a lot of money - because he wants press releases sent out to the New York Times, the LA Times - all the major papers around the country - and he think they'll be more likely to print them if they come from a "big" firm as opposed to a one-person PR firm. I think it doesn't matter where the press release comes from as long as its well written. What are the opinions here?[/quote:dmj1i0sv] I think the most important factor is whether your press release will reach the most number of your target audience or not. It won't matter if the press release is well written if no one has the opportunity to read it. I also believe that credibility comes with having your press release in an established source like The New York Times, LA Times, etc... For instance, if you enjoyed playing tennis, who would you trust more? The advice from a recreational tennis player who has his own column in [i:dmj1i0sv]Tennis Magazine[/i:dmj1i0sv] [u:dmj1i0sv]or[/u:dmj1i0sv] the recreational tennis player who has his own blog? I don't know about you, but I'd listen to the guy on [i:dmj1i0sv]Tennis Magazine[/i:dmj1i0sv] over the blog owner at least 9 out of 10 times.
Re: Does a New Company need a "Big" PR firm? - I agree with Kevin [quote:3b8fyubd]I think the most important factor is whether your press release will reach the most number of your target audience or not.[/quote:3b8fyubd] You dont a big company that will charge mega bucks as Im sure they will even add a %age to the cost of the press release. Im sure if you approach New York Times, the LA Times with every thing presented professionally I think it will still stand the same chance. I would start advertising online, then locally thats when the NYT can see what there missing out on! And to test the water first!
Re: What I'm reading this weekend - Nov 5, 2010 - Tough to say Yinka - I'm usually working about 25 hours per week - a lot of that is online. For most of these articles I pick them up from my RSS feeds, recommendations from friends, or Twitter posts. I'll do a quick skim of the article and if it looks interesting I'll save it for later to read.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

What is Give Back Marketing?

SEO and the Entrepreneur

Designing Employee-Enhancing Training Programs

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.