What are you competing on?

By Jeff White: Jul 12, 2010

Filed Under: Jeff, Strategy

There’s a story in today’s Chronicle Herald about a small business that’s going under due to pressure from big box stores. It doesn’t matter who or what it is. It’s a fairly common refrain. As most people know, the vast majority of companies that are started don’t make it, but it is sad when a company with as much heritage as this one closes down.

I’m guessing that there are similar stories all over North America in local papers in every town and city. As our voracious appetites for cheaply produced goods and services increases day over day, we can’t help but to look for the best deal. And where does that leave the poor, hapless business cited above? Well, if they’re like many small independent producers of goods, it leaves them with an ever shrinking portion of the market. And here’s why:

Unless you’re Walmart, you can’t win on price.

Now, lots of people will say ‘what about getting the government to help?’ Can’t we legislate some way to prevent the interlopers from killing off small, local businesses? I say, please no. The last thing we need is another Cat ferry that can’t survive without subsidies. No, businesses that can’t learn to properly market themselves deserve to die. Running a business, like anything else, is about the decisions that you make. You need to have the right product. If you sell physical goods, you need to be in a convenient location. And lastly, you need to learn how to tell people about your business.

Make no mistake, if your product is good and your location is acceptable the only thing holding you back is marketing. Many companies spent less on marketing in the recession, despite that fact that it’s been proven time and time again that spending money on marketing when times are tough means that you’re more likely to come out on top when it’s over. If the yellow pages aren’t working for you (and, let’s face it, unless you’re a plumber, those ads are a waste of time), then maybe you need to consider other avenues. If radio and newspaper aren’t bringing in the customers, and you can’t afford TV, maybe you need to hone your story and start a blog. Granted, social media isn’t going to solve your problems either, and without a plan for how you’re going to craft that story, you might as well waste more money on one shot newspaper ads. But, there’s never been a better time to tell people about who you are and why you’re better, different and more focused on the quality of your offering than the giant big box stores.

Let’s face it though: there is no magic marketing bullet, especially if the fundamentals of your business aren’t working. However, if, like the company I mentioned off the top had a decent story to tell and a clever way of doing it, maybe they wouldn’t be liquidating their assets right now.

It’s something to think about.