Small businesses are facing significant challenges in today’s connected world. Many small and mid-sized business owners view large brands as consistently outperforming them on and offline and there seems to be little advantage for them to combat against their larger competitors. But there is some hope and light at the end of the tunnel for those that choose to see opportunity and act on it.
What is the biggest advantage small businesses have over big brands?
Customer Experience Is A Huge Advantage For SMBs
A recent survey conducted by 8×8, Inc. finds that customers prefer the experience they had with small businesses over those with large brands. This fact should not only give small brands some substantial confidence, but should cause small business owners to immediately rethink how they are engaging with their customers. We have always said that knowledge isn’t power, but use of knowledge is where the power comes from and this customer survey is packed with knowledge that needs to be acted on by every small business in the U.S.
Around 1,000 U.S. consumers, 18 years or older were surveyed for this study. There were 510 males and 490 females polled in the survey and they self identified their employment status, estimated household income, education, ethnicity and marital status. The following are some of the key findings of the survey.
Advantages Small Businesses Have Over Large Brands
Large brands are far LESS likely to provide a positive customer experience like a small business can.
As a small business, you have a huge advantage over large brands. In fact, 71% of consumers said they have a better experience with a small business over large brands. What’s more, 80% of those surveyed rated their small business experiences as either “good” or “very good” overall. Lastly, small businesses were more likely to deliver on personalization, with only 30% of consumers polled saying they haven’t received the responsiveness or personalization they desired.
Takeaway: Your small business should be focusing on creating improved experiences for your customers beyond what you are currently doing. Leveraging this advantage over your biggest brand competitors is like a huge open floodgate that you need to exploit well.
Customers say experience over cost drives their decisions.
Small brands often cite buying power and the subsequent inability to compete on price with larger brands. But the fact is that consumers say that customer service is a much bigger priority for them. 86% of those surveyed stated that they are willing to pay more for a better experience. When customers have better experiences it is much more likely to have long-term benefits for your small business. In fact 57% of consumers said that they are more likely to leave a favorable review for a small business after a positive experience, compared to a larger brand.
Takeaway: Exceptional customer service and buyer experiences are extremely valuable to your customers AND your small business in both the short and long-term. Change the culture within your business to reward positive customer experience outcomes and train to develop those outcomes more consistently.
Customers expect less from smaller brands.
Though 82% of consumers said that they think a personalized experience is important, personalization was not necessarily expected of the small business as it is with larger brands. In fact, nearly 60% of consumers polled don’t expect small businesses to know their purchase history and provide technical actions that reflect that.
Takeaway: In an increasingly technical world, customers want technology solutions that are helpful for them when dealing with brands on and offline. You will want to invest in additional technologies that facilitate these capabilities for your customers, but for now it is less important to them.
Small Business – Competing In Customer Experience
Often times small business owners state their largest competition is big brands that they really are helpless to compete with. But the fact is that most small businesses real competitors are other local small businesses that are doing a far better job of out executing them. Knowing who your biggest competitors are enables you to take action to be more effective against them.
Having said this, it is clear that consumers prefer the customer experience that comes from the small business over the larger brand. In this case, you are going to have a far more difficult time competing with other small brands than you will against your bigger competitors over customer experience. Therefore you are going to have to better understand your customer and what drives a great experience in their mind and address that within your marketing and subsequent customer interactions, if you are going to win!
Executing Customer Experience Well
Today’s customers have expectations that are beyond those of yesterday. They want to easily find your brand online and when they do, they want clear and easy access to information about what you do and why you are better. We call this messaging within marketing. Most small brands do not have the experience to write messaging that conveys what the customer is looking for and getting across that clear impression that opens doors to customer opportunities.
Most Important Point – Be sure that you are outperforming your small competitors on customer experience and by default you will easily be outperforming your largest brand competitors as well!