Word is out that a Wal-Mart or Rite Aid or Home Depot is looking to move in on the outskirts of your community. While local politicians hail the news has a promise of new jobs and revenue for the community and consumers hail the news with mixed feelings, cold shivers are sent through the local business owners’ spines. They don’t need to look far to see what the giants have done to other communities to guess what will probably happen to them.
Studies have shown that when a national chain moves into town, they effectively shift 84% or more of the spending from local businesses to the national chain. One study in a small town in Massachusetts, for example, concluded that a proposed Wal-Mart would cost local businesses $35 million in lost sales. The 177 new jobs Wal-Mart would create would be offset by the projected 148 lost jobs caused by the lost sales. The end result would be many of the locally owned and operated businesses would close their doors for good.
There are some steps a locally owned and operated business can take that may help them remain competitive with their new neighbor. Of the ten steps presented below, the first two are a must in today’s economy. More and more, consumers are shopping online, first, before deciding where to go to get the best deal. Not only that, but consumers are also turning more and more to the convenience of purchasing online. It is not a farfetched notion that in the near future, the brick and mortar stores of today will be little more than a final distribution warehouse direct to the consumers’ home in the future.
While this author considers the first two steps to be extremely important, the remaining eight are equally important. Even if a national chain isn’t proposed for your community or a nearby community yet, implementing any or all of these steps into your business plan may help you remain competitive in today’s changing economy and put you on solid ground the day you will need to face the giants.
1. Build a website
Of all the steps, building a website is the one that costs the most, either in time, money, or both. What sort of website do you need? The easiest way to answer that question is look at what your big name competitors are offering. Do they offer online shopping? Live customer service? Coupons? Calculators to estimate cost? Appointment scheduling? Your budget will determine how many of the features offered by your competitor you can match, but don’t stop there. Listen to your customers. You may think of other features to make your website, and your company, stand out.
Once you have an idea what you need in your website, you have two choices. The easiest, but most expensive choice, is to hire a professional to build the site for you. The old adage, “you get what you pay for”, applies here whether you hire a professional or build the site yourself.
If you hire a professional, pricing can start as little as a monthly fee of less than $100 per month to as much as a few thousand dollars for set up and a monthly fee of several hundred to maintain. Make sure you detail to the professional exactly what you want in your website before signing any contracts. One small business, for example, signed a three-month contract at $99 per month. What he got was a basic website he could have built himself for less than five dollars per month.
If you build the website yourself, plan on spending a lot of time maintaining and refining the site to keep it in the top searches. There are many hosting sites out there, but the one that is consistently ranked high and the one hosting Shop Local Delmarva is Blue Host. One word of caution: steer clear of free hosting sites. Usually, free hosting sites make their money by placing ads on your website. Just as you wouldn’t allow another business to advertise in your brick and mortar store, you don’t want other businesses advertising in your virtual store.
Of all the steps, building a website is the one that costs the most, either in time, money, or both. What sort of website do you need? The easiest way to answer that question is look at what your big name competitors are offering. Do they offer online shopping? Live customer service? Coupons? Calculators to estimate cost? Appointment scheduling? Your budget will determine how many of the features offered by your competitor you can match, but don’t stop there. Listen to your customers. You may think of other features to make your website, and your company, stand out.
Once you have an idea what you need in your website, you have two choices. The easiest, but most expensive choice, is to hire a professional to build the site for you. The old adage, “you get what you pay for”, applies here whether you hire a professional or build the site yourself.
If you hire a professional, pricing can start as little as a monthly fee of less than $100 per month to as much as a few thousand dollars for set up and a monthly fee of several hundred to maintain. Make sure you detail to the professional exactly what you want in your website before signing any contracts. One small business, for example, signed a three-month contract at $99 per month. What he got was a basic website he could have built himself for less than five dollars per month.
If you build the website yourself, plan on spending a lot of time maintaining and refining the site to keep it in the top searches. There are many hosting sites out there, but the one that is consistently ranked high and the one hosting Shop Local Delmarva is Blue Host. One word of caution: steer clear of free hosting sites. Usually, free hosting sites make their money by placing ads on your website. Just as you wouldn’t allow another business to advertise in your brick and mortar store, you don’t want other businesses advertising in your virtual store.
2. Establish an Internet presence
If your budget doesn’t allow for a website, you can still establish an Internet presence at no cost other than time. If you have a website, you still need to enhance your Internet presence.
Join social networking sites like FaceBook or Blogger. Be active and offer useful information your customers can use. Social networking sites allow you to establish yourself as an expert for the products or services you offer. If you sell groceries, offer a home recipe and suggest using the products you sell. If you sell a local artists’ works, talk about the natural beauty of Delmarva that inspired the work and the importance of preserving that beauty. Interacting with potential customers by offering them information goes a lot further in gaining a new, loyal customer than simply telling them about the great products or services you have on sale this week.
List yourself in online directories. Some directories charge a fee and some are free. If a fee is involved, search around the directory to get a feel for the layout and the likelihood the big name stores that can afford the bigger and flashier advertising space may overpower your listing. As a general rule, if listing your business is free, list it. The more frequently the search engines’ bots find your name out there, the more likely a search related to your business will return your name in the results. In addition to the directories you may be familiar with, you may want to consider these top 50 local directories. As a reminder, Shop Local Delmarva offers a free listing to all locally owned and operated businesses.
If your budget doesn’t allow for a website, you can still establish an Internet presence at no cost other than time. If you have a website, you still need to enhance your Internet presence.
Join social networking sites like FaceBook or Blogger. Be active and offer useful information your customers can use. Social networking sites allow you to establish yourself as an expert for the products or services you offer. If you sell groceries, offer a home recipe and suggest using the products you sell. If you sell a local artists’ works, talk about the natural beauty of Delmarva that inspired the work and the importance of preserving that beauty. Interacting with potential customers by offering them information goes a lot further in gaining a new, loyal customer than simply telling them about the great products or services you have on sale this week.
List yourself in online directories. Some directories charge a fee and some are free. If a fee is involved, search around the directory to get a feel for the layout and the likelihood the big name stores that can afford the bigger and flashier advertising space may overpower your listing. As a general rule, if listing your business is free, list it. The more frequently the search engines’ bots find your name out there, the more likely a search related to your business will return your name in the results. In addition to the directories you may be familiar with, you may want to consider these top 50 local directories. As a reminder, Shop Local Delmarva offers a free listing to all locally owned and operated businesses.
3. Present a very professional image
Whether on the Internet or in your store, image is everything. Consistency is important in presenting that image. If you don’t have a business logo, get one. If you can’t afford a professional to design one for you, there are all sorts of free tools on the Internet to help you design your own. Use it on the Internet, in your store, and on your business cards.
Be constructive and professional in your written and verbal conversations and don’t criticize your competition. Saying “We offer ceiling fans in unique styles and designs made right here in the US that you can’t find elsewhere” goes a lot further than saying, “We don’t offer the cheap, made-in-China junk that other stores offer”.
Train your employees to project the same professional image that you project. If a new customer is impressed with your online image, but then walks in your store and an employee who lacks that professional image serves him, there’s a good chance you will lose that customer.
Whether on the Internet or in your store, image is everything. Consistency is important in presenting that image. If you don’t have a business logo, get one. If you can’t afford a professional to design one for you, there are all sorts of free tools on the Internet to help you design your own. Use it on the Internet, in your store, and on your business cards.
Be constructive and professional in your written and verbal conversations and don’t criticize your competition. Saying “We offer ceiling fans in unique styles and designs made right here in the US that you can’t find elsewhere” goes a lot further than saying, “We don’t offer the cheap, made-in-China junk that other stores offer”.
Train your employees to project the same professional image that you project. If a new customer is impressed with your online image, but then walks in your store and an employee who lacks that professional image serves him, there’s a good chance you will lose that customer.
4. Know your competition
Not only do you want to know the products or services your competitor offers, but you want to know as much as you can about how they conduct their business. What are their return policies? What is their delivery area? Do they charge for delivery? Do they offer any warranties or guarantees and on what? Do they have a customer rewards program? The more you know what your competitor offers, and equally important, what your competitor doesn’t offer, the more likely you can win back loyal customers by offering the same, better, or different enticements.
Not only do you want to know the products or services your competitor offers, but you want to know as much as you can about how they conduct their business. What are their return policies? What is their delivery area? Do they charge for delivery? Do they offer any warranties or guarantees and on what? Do they have a customer rewards program? The more you know what your competitor offers, and equally important, what your competitor doesn’t offer, the more likely you can win back loyal customers by offering the same, better, or different enticements.
5. Fill a void
In getting to know your competitor, you learn what products or services your competitor offers and at what price. You may not be able to offer the common products or services at the same price the big name store can, but you can specialize in what your competitor doesn’t offer. A good example, based on this author’s personal experience, can be found in Easton in Talbot County. Homeowners and contractors alike flock to Lowe’s for all their building needs. Across the street from Lowe’s is a local hardware store that is thriving. When customers can’t find what they want in Lowe’s, Lowe’s sales associates often refer the customer to the local hardware store. The hardware store thrives because they concentrate on stocking products customers want, but that don’t sell in large enough quantities for Lowe’s to justify carrying. This example illustrates why it is important not to criticize your competitors, too. If the local hardware store complained about their big neighbor, odds are good that employees of Lowe’s wouldn’t be referring customers to them.
In getting to know your competitor, you learn what products or services your competitor offers and at what price. You may not be able to offer the common products or services at the same price the big name store can, but you can specialize in what your competitor doesn’t offer. A good example, based on this author’s personal experience, can be found in Easton in Talbot County. Homeowners and contractors alike flock to Lowe’s for all their building needs. Across the street from Lowe’s is a local hardware store that is thriving. When customers can’t find what they want in Lowe’s, Lowe’s sales associates often refer the customer to the local hardware store. The hardware store thrives because they concentrate on stocking products customers want, but that don’t sell in large enough quantities for Lowe’s to justify carrying. This example illustrates why it is important not to criticize your competitors, too. If the local hardware store complained about their big neighbor, odds are good that employees of Lowe’s wouldn’t be referring customers to them.
6. Emphasize the uniqueness of your products or service
The big chain store can always undersell you, even if at a loss, to win your customers and eliminate you as a competitor. In fact, some big chains are known to practice this tactic, only to raise their prices by as much as a third higher than the average once the local competition is eliminated. This is why it is important to start emphasizing now, and continue to emphasize, what makes your products or services unique. Customers are always looking for a good deal, but price alone isn’t how many customers decide where to shop.
Define one or two main points that make your product or service unique. Are most of your products made right here in the US? Do you carry unique or hard-to-find styles and designs? Do you offer a personal shopper who will help customers around the store and select what the customer needs (particularly helpful for the elderly or disabled)? Do you use environmentally friendly products around the customer’s home? How many years experience do you or your employees have in your profession? What professional certifications or recognitions have you, your employees, or business received?
Build value into those one or two main points and ensure all of your employees understand them. Consumers are willing to pay a little more if they know they are getting something they can’t find in a big chain or are dealing with well trained professionals.
The big chain store can always undersell you, even if at a loss, to win your customers and eliminate you as a competitor. In fact, some big chains are known to practice this tactic, only to raise their prices by as much as a third higher than the average once the local competition is eliminated. This is why it is important to start emphasizing now, and continue to emphasize, what makes your products or services unique. Customers are always looking for a good deal, but price alone isn’t how many customers decide where to shop.
Define one or two main points that make your product or service unique. Are most of your products made right here in the US? Do you carry unique or hard-to-find styles and designs? Do you offer a personal shopper who will help customers around the store and select what the customer needs (particularly helpful for the elderly or disabled)? Do you use environmentally friendly products around the customer’s home? How many years experience do you or your employees have in your profession? What professional certifications or recognitions have you, your employees, or business received?
Build value into those one or two main points and ensure all of your employees understand them. Consumers are willing to pay a little more if they know they are getting something they can’t find in a big chain or are dealing with well trained professionals.
7. Collaborate with similar businesses
The national stores have the advantage of pooling the resources of hundreds, if not thousands, of stores nationwide – and even internationally – to be able to offer products and services far below what the average Mom and Pop store can offer. The local business can do the same, albeit on a smaller scale, if they are willing to team up with similar businesses in their community, even if it means teaming up with your local competitors.
Perhaps there is a trade show you would like to attend, but the cost isn’t in your budget. By teaming up with one or two other businesses, the cost becomes affordable and the experience can be mutually beneficial. If you know a couple of other businesses who source their products from the same vendor as you, by teaming up with them to schedule your deliveries on the same day, you may be able to get a discount for bulk buying, savings you can pass on to your customers. You may also be able to receive better warranties or return policies, which, in turn, you can pass on to your customers. If you and similar businesses use different vendors, talk to your vendor about consolidating and compare notes with what the other vendors told the businesses you are considering collaborating with. Perhaps switching vendors would be mutually beneficial for everyone.
The national stores have the advantage of pooling the resources of hundreds, if not thousands, of stores nationwide – and even internationally – to be able to offer products and services far below what the average Mom and Pop store can offer. The local business can do the same, albeit on a smaller scale, if they are willing to team up with similar businesses in their community, even if it means teaming up with your local competitors.
Perhaps there is a trade show you would like to attend, but the cost isn’t in your budget. By teaming up with one or two other businesses, the cost becomes affordable and the experience can be mutually beneficial. If you know a couple of other businesses who source their products from the same vendor as you, by teaming up with them to schedule your deliveries on the same day, you may be able to get a discount for bulk buying, savings you can pass on to your customers. You may also be able to receive better warranties or return policies, which, in turn, you can pass on to your customers. If you and similar businesses use different vendors, talk to your vendor about consolidating and compare notes with what the other vendors told the businesses you are considering collaborating with. Perhaps switching vendors would be mutually beneficial for everyone.
8. Take care of your employees
Your business is only as good as your weakest employee. You may not have the resources to offer health plans, retirement benefits, education programs or advancement opportunities, but there are plenty of other ways to make an employee feel important and appreciated so that they’ll want to perform their job to the best of their ability.
Your employees are people, not a commodity to use that will allow you more time off or increase your bottom line, only to be disposed of when the economy slows down. Know why each of the employees are working for you and what their goals are. Is the employee fresh out of school and looking to establish a work history? A retiree who wants to supplement his retirement benefits or simply just wants to get out of the house? A spouse who wants to help supplement the household income? A part time college student looking to build a new career? Someone who needed a job because of a recent layoff?
Once you know why an employee is working for you, be supportive and encouraging with the employee. Maybe you can be more flexible with the work schedule. Help with purchasing college textbooks. Assign increasing responsibilities and be an excellent reference source for the employee’s future career. Be on the lookout for a new job the employee may really want. If you show genuine care for your employees, where they are at, and where they want to be, you’ll gain much more productive employees and possibly life long, loyal customers through the employee and his family and friends.
Your business is only as good as your weakest employee. You may not have the resources to offer health plans, retirement benefits, education programs or advancement opportunities, but there are plenty of other ways to make an employee feel important and appreciated so that they’ll want to perform their job to the best of their ability.
Your employees are people, not a commodity to use that will allow you more time off or increase your bottom line, only to be disposed of when the economy slows down. Know why each of the employees are working for you and what their goals are. Is the employee fresh out of school and looking to establish a work history? A retiree who wants to supplement his retirement benefits or simply just wants to get out of the house? A spouse who wants to help supplement the household income? A part time college student looking to build a new career? Someone who needed a job because of a recent layoff?
Once you know why an employee is working for you, be supportive and encouraging with the employee. Maybe you can be more flexible with the work schedule. Help with purchasing college textbooks. Assign increasing responsibilities and be an excellent reference source for the employee’s future career. Be on the lookout for a new job the employee may really want. If you show genuine care for your employees, where they are at, and where they want to be, you’ll gain much more productive employees and possibly life long, loyal customers through the employee and his family and friends.
9. Support your community
There is no better form of advertising than getting your name mentioned throughout your community. Sponsor local events, organizations, schools, and charities. That doesn’t always mean, “cash donation”, either. Buy new uniforms for the high school football team. Volunteer to be a bus driver for a local Church event. Donate food and drink for the participants of a local parade. Offer your business site for a blood donation drive or other charitable contribution. Anytime you offer money, time, or services to your community, community residents will know and remember what you did for them. By word of mouth, the best form of advertising, customers will visit you because they don’t want you to go anywhere anytime soon.
There is no better form of advertising than getting your name mentioned throughout your community. Sponsor local events, organizations, schools, and charities. That doesn’t always mean, “cash donation”, either. Buy new uniforms for the high school football team. Volunteer to be a bus driver for a local Church event. Donate food and drink for the participants of a local parade. Offer your business site for a blood donation drive or other charitable contribution. Anytime you offer money, time, or services to your community, community residents will know and remember what you did for them. By word of mouth, the best form of advertising, customers will visit you because they don’t want you to go anywhere anytime soon.
10. Remain positive
No matter how slow the economy is or how much you think customers like the big chain stores more than your store - remain positive. This step is actually part of the projecting a very professional image step, but deserved to stand on its own. If a customer makes an offhand remark like “I don’t know how you stay in business with those big stores in the shopping plaza down the road,” that is not an invitation to spout off about the importance of shopping locally. It is an invitation for you to emphasize your unique products and services. The customer may steer the conversation towards how the big stores are killing the local businesses, but that still is not an invitation to spout off about the evils of your national competitors. It is an opportunity to reinforce the idea that locally owned and operated businesses, yours included, offer unique products and services the big chains often don’t offer. Hopefully, the customer will walk away with the feeling that maybe he should visit his locally owned and operated stores a little more often.
Remaining positive means you never bash a competitor, locally or nationally owned. You never lament about how slow business is, especially since the big boys moved into town. You never give the impression that customers who choose to shop at a big store are making a wrong choice. You can’t guilt people into doing business with you. You can only give them good reasons why they should do business with you instead of choosing a competitor.
No matter how slow the economy is or how much you think customers like the big chain stores more than your store - remain positive. This step is actually part of the projecting a very professional image step, but deserved to stand on its own. If a customer makes an offhand remark like “I don’t know how you stay in business with those big stores in the shopping plaza down the road,” that is not an invitation to spout off about the importance of shopping locally. It is an invitation for you to emphasize your unique products and services. The customer may steer the conversation towards how the big stores are killing the local businesses, but that still is not an invitation to spout off about the evils of your national competitors. It is an opportunity to reinforce the idea that locally owned and operated businesses, yours included, offer unique products and services the big chains often don’t offer. Hopefully, the customer will walk away with the feeling that maybe he should visit his locally owned and operated stores a little more often.
Remaining positive means you never bash a competitor, locally or nationally owned. You never lament about how slow business is, especially since the big boys moved into town. You never give the impression that customers who choose to shop at a big store are making a wrong choice. You can’t guilt people into doing business with you. You can only give them good reasons why they should do business with you instead of choosing a competitor.
