Strategies For Defeating Your...

Wally Bock We’re all familiar with the story of David and Goliath. Goliath, the giant champion of the Philistines, taunts the Israelites arrayed on the field of battle.

Goliath’s idea is that instead of having the armies go at each other, he will just take on whatever champion the Israelites send out, and that will decide the day. If Goliath wins, the Israelites are conquered and go off to slavery. If Goliath loses, well, he really doesn’t expect to lose.

There’s a lot of reason for that confidence. This guy is big. He’s 10 feet tall, he’s got monster armor and weapons and he’s got a bad attitude.

Sound familiar?
If you’re a small business, you may recognize this profile. This is what happens when monster competitors take on the small fry. But it’s a good idea to remember what happens to Goliath.

Goliath lost. And he didn’t even lose to some professional warrior champion. Instead, he lost to a kid with a slingshot named David. And ever since his battle with Goliath, David has been inspiration for small players everywhere on the field against big ones.

In today’s business world, there are lots of giant players. Sometimes they are the giant chains called the “big box” stores, like Wal-Mart or Home Depot. Or sometimes Goliath is a specialty chain, like a Starbucks. The good news is that there are lots of small companies out there not only holding their own against Goliath competition, but actually winning the battle and increasing profitability.

How do they do it? I’ve identified three key strategies that can help you build profit against Goliath competition: 1. Position your strength against their weakness. 2. Narrow your niche. 3. Band together. Of these three, the first—positioning strength against weakness—is the most important.

Suiting up for battle
David didn’t go out to meet Goliath in the standard warrior’s outfit. That was Goliath’s strength. Instead, David took his strength and matched it up against Goliath’s weakness.

To make this work, you have to know the strengths and the weaknesses of the Goliaths you’re facing. Let’s start with the strengths.

Goliath has a lot of money and marketing muscle. Many times the ad budgets allocated to an individual Wal-Mart store are larger than the entire revenue of some of the small locally owned stores pitted against it. That money buys lots of high-quality professional help and media placement. Goliath is also very good at logistics and purchasing, which means Goliath gets to offer really low prices.

If you want to beat Goliath, you’re not likely to do it on rice or on the basis of slick or saturation advertising. That would be like David dressing up in heavy armor and trying to fight Goliath with a sword. Instead, start by analyzing your own strengths. What sets you apart from other businesses? Talk to your best customers and find out what you do for them that’s special.

Build on relationships
Many small businesses have been in town for ages and have roots that go deep into the community. If that’s you, build on it. Don’t be bashful about playing up the local connection. Mention it in your advertising. Talk it up to your customers. Hang “locally owned” signs in your window.

Get those relationships cooking, too. Most small businesses can do through their salespeople what big stores have to use technology and procedure manuals to accomplish. Goliath often has the computer and inventory system ruling the people. You don’t have to.

Here’s a caution, though. If you do this, you’ve got to pay attention to all the people who have direct contact with your customers. These folks are likely to be the “rock in your sling” when you go up against Goliath.

The Reason for this is actually pretty simple. Customers don’t have relationships with businesses. They have relationships with other people. If folks are coming back to your business over and over again, one reason is likely because they’ve got a good relationship with somebody who works there.

The biggest advantages you’ll get from a competitive standpoint are the ones that come from relationships and culture, because those are the strengths that can’t be copied. Your competition, large and small, can copy your inventory, beat your prices and mimic your ad campaigns. They can find a location that’s a good or better than yours. But relationships and culture can set you apart. They’re the best kinds of strength to position against Goliath’s weaknesses.

Attacking Goliath’s weaknesses
Okay, that’s Goliath’s strengths. But what about his weaknesses? A lot of Goliath’s weaknesses are actually the flip side of his strengths. Goliath’s strengths come from being really, big, and so do his weaknesses.

Think about it. Big chains put lots of money into developing ad campaigns and placing ads in local media. Those ad campaigns are developed for the entire chain, and usually planned months in advance. They can’t really have different campaigns for each location and they can’t change the campaigns easily.

Does that give you any ideas? Smaller organizations can almost always be more flexible and quicker off the mark that bigger ones. Plan your ad campaigns with shorter lead times than Goliath. Counter Goliath-sized advertising with targeted and niche advertising of your own.

You can apply the same principle to inventory. Sure, Goliath can stock lots and lots of stuff across all categories of merchandise. What Goliath usually can’t do, though, is stock a couple of special, non-standard items for a particularly valuable customer.

Advertising and inventory flexibility are good and can give you an advantage, but you still want to build on the people stuff. Concentrate on your best customers. You want to treat them like they’re your key to profit, because they are. On average, repeat customers cost five times less to retain than new customers cost to acquire. Not only that, but your best repeat customers are worth thousands of dollars more than your “average” customer over their lifetime.

Can you serve your best customers in a special way, a way that no computer program could possibly match? That’s just one way to position your strength in relationships and people against Goliath’s technology. Can you ask your customers about their needs and then really listen to the answers? Goliath can spend millions on market research and not get the quality of information you’ll find with a few casual conversations with good customers.

The key to victory in your battle against Goliath-sized competitors is to be like David. Take your strengths and position them against Goliath’s weakness. Then compete hard and smart. And never forget how the story came out.

Wally Bock travels the world and the Web helping individuals and businesses improve results with his consulting, speaking and newsletters.

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