Why Small Is Better Than Big

Fifty to 80 percent of all small businesses fail. The marketplace is crowded, competition is tough, and resources are thin. To succeed, you need to turn weakness into opportunity. Here are five keys to success.
1) Don’t Compete — Differentiate
The biggest mistake small businesses make is trying to directly compete with bigger businesses. Matching prices, offering the same depth of selection, etc. But that’s a losing battle. It’s like bringing a knife to a gun fight. Big businesses work on a scale that makes direct competition tough.
So don’t compete — differentiate. Find dimensions you can excel on and focus on those. Maybe it’s better customer service or a more personal touch. Maybe it’s a niche that the big guys/gals have skipped because it’s not profitable enough. Figure out a unique place where you can succeed and they can’t.
2) Be Nimble
When we think about David versus Goliath, the advantages of the big guy (Goliath) are clear. He has size, strength, and power on his side. But if we look a little closer, the little guy (David) actually has a lot going for him as well. He’s quick, agile, and not encumbered by the heavy armor, shield, and weaponry that slows Goliath down. And David wins in the end because he uses that nimbleness to outmaneuver Goliath.
You might not have big business scale, but use that to your advantage. Be nimble. Be flexible. Try things. Stick with them if they work and try new things if they don’t. As a small business you have the opportunity to be agile. Use it.

3) Do Something Remarkable
Music artist Nipsey Hussle recently did something remarkable. Rather than selling his album for the usual $10 or $15, Nipsey did something revolutionary. He jacked up his prices. He released a limited edition album for $100. The price included admission to a special concert of his and called the campaign Proud2Pay, for people who were true fans of his music.
And he made $100,000 the first day the album was released. Got written up in most major music publications and received huge buzz for his savvy move.
Could Nipsey have done this through a major label contract? No. Legal would have complained, distribution would have raised concerns, and the whole thing would have imploded. But because he did it on his terms, Nipsey was nimble enough to make it work.
Don’t just be nimble, use that flexibility to do something remarkable. Something so novel and different that people have to tell others.
4) Word of Mouth > Advertising
Most small businesses don’t have the money for a flashy TV spot or a big advertising campaign. Good news. You don’t need one.
Successful small business marketing is all about turning customers into advocates. Get people who like you and buy from you to recommend you to their friends and colleagues. Word of mouth is 10x as effective as traditional advertising. It’s more trusted and more targeted. But it’s also much cheaper. You don’t need a huge budget; you just need to get people to spread the word.
As I talk about in Contagious: Why Things Catch On, six key factors, or STEPPS (Social Currency, Triggers, Emotion, Public, Practical Value, and Stories), drive people to share word of mouth about all sorts of products and businesses — from consultants and restaurant owners to yoga studios and entrepreneurs, from for-profits to non-profits, and from B2C to B2B. By understanding why people talk and share, you can craft contagious content, and get your own products and ideas to catch on.
5) Ask Your Customers For Help
This is probably the most surprising thing on the list. “Ask your customers for help?” Someone might say: “I’m supposed to be helping them. How can I ask them to help me?” or “I’m barely able to hold on to the few customers I have. If I ask more of them, won’t they leave?”

Most businesses would never think of asking their customers for help. It’s the last thing they want to do. But small business success depends on strong customer relationships. You have the time to get to know your customers, to understand what they need and how to treat them right. Why not use that knowledge to your advantage?
If your customers like you, why not ask them to refer a friend? If they’ve enjoyed working with you, why not ask them to write a testimonial for your website? I’m not recommending big asks — just using your customers as the marketing team you can’t afford. Not only will they say yes, they’ll be excited to help. Because you didn’t just ask them to help, you invited them to become something more than just a customer. Part of something bigger than themselves. And that is something everyone can get behind.
Jonah Berger is a professor at the Wharton School and author of the New York Times bestseller Contagious: Why Things Catch On.
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Photo: Shutterstock

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