Small businesses can live in fear of the big guys. Big bucks, big locations, big advertising budgets and brand recognition can be tough to competition. Although the internet was supposed to "level the playing field", in reality it doesn’t. It’s always going to be tough for a business with $15,000 in assets to compete directly with a business that has $150,000,000 or more. It’s kind of like imagining your high school football team going up against the Tennessee Titans.

Now for the good news: the Titans don’t play your high school’s team. There’s not enough money in it for them and the high school team has its own fans. Even if they were playing at the same time, there still would be a number of the high school audience who’d tape that pro game for later or just catch the highlights on the sports reports. Why would they? They’ve got a personal connection to the players, the team and the school.

You’re smart. You know that you can’t compete against Wal-Mart directly. But there are things that you can do to grow your business even if the big guys are after your customers. You must make that connection to your customers so that they’ll be on your side. That means having the things that they want, when they want it, where they want it and at a price that they can afford.

Have a Game Plan

Even though business plans can be a lot of work and you don’t HAVE to do them unless you’re trying to convince someone else to give you money, there’s a lot of value in having a business plan. For an operating business, the key to your business plan is to know who your customers are and which customers you want to have in the future. Then find out what they want. Pretty simple, huh?

How do you find out? Ask them. You can do it formally or informally, by putting some serious bucks into a scientific survey or by asking them whether or not they found what they needed when they check out.

Now, do you already have enough customers for your business? Or do you have to get out and find some more?

Give Them What They Want

One of the most effective things that you can do is to develop a stronger relationship with the customers who already buy from your business. A simple business rule is that 20% of your customers will produce 80% of your sales. In many cases, it’s even stronger than that. Take the customers you have and find out more about them. What else do they want that you can get for them? How do they want it?

When you reduce big business Amazon.com’s business model down to its most simple terms, Jeff Bezos considers Amazon’s greatest assets to be its customers. That’s right. They’ve got millions of dollars wrapped up in warehouses and technology but they consider the most valuable asset to be their relationship with the customer. You can’t match their money, but you can deliver an even better experience for your customer than the big businesses do. Why?

Bricks & Mortar

If you’ve got a physical store location AND the customer is in the store, you’ve got a huge advantage over anyone else. Why? Because shopping can be hard and tedious work. If you can save your customers time and get them what they want, you’ll have happy customers. They’ve already gotten to your store and going anyplace else is going to take time away from the other things that they could be doing.

That’s okay, but what about the "lookie-loos"? A lot of customers still shop for entertainment! That’s still good news, a live store can be much more entertaining that most web sites, which are kind of like slow-loading catalogs. It’s easier for people to find what they want in your store and you can have a much greater selection than most sites have on their e-commerce sites. Best of all, you can engage all of their senses. Unobtrusive mood music, good smells, attractive and well displayed merchandise that they can pick up and try out relaxes customers but gives them the opportunity to buy. Best of all, they can buy it and take it home immediately!

Okay, what if you’re up against the big box store? Home Depot is a warehouse stocked floor to ceiling with lots of stuff. How is your home improvement store going to beat that?

Well, Home Depot does have a lot of advantages, so I suggest you start by looking at the disadvantages! Always shop your competition and get to know them and how they do business. Put together a list of the things that your customers look for and go to the competition prepared to shop – and plan to buy an item or two so that you can experience what their checkout process is like.

When you approach their store, the first thing to consider is the location. How convenient is it? How does it compare to your location? What’s the parking like? There may not be much that you can change about your location and parking, but you need to make the comparison. If your competition is like the Home Depot that I sometime shop at, it’s conveniently located but finding a parking place can be difficult.

Go inside the store, pick up their flyer of specials. How do they compare with what you’ve got on sale? Do you even have a flyer that your customers can pick up as they go through your store? If not, you may want to consider that. If you’re small, it doesn’t even have to be expensively printed, you can do it on your own computer and printer.

Look at how their specials are structured. You’ll want to take their flyer home with you and really look at what they’re offering and how you can compete. Each chain has a "map" for laying out their specials and they do it because it works. The first page is devoted to low cost items that most of your customers need to keep restocking. Subsequent pages move up the profit and price scale a bit, keeping an eye on specific prices -- $1, $2, $3, $5, $10, then higher prices with a better profit margin in the middle and back, then down again to that lowest set of price points on the back page.

You already know that specials bring traffic into the store. You can decide to go one of two ways with your specials. It’s hard to be price competitive with the big chains that have big purchasing power, so you may want to look at using a contest, sweepstakes or entertainment to bring your customers in. If you run a sporting goods store, have special fund raising nights for people on the local high school teams or the slow pitch softball association. You may want to arrange to bring in a local sports star to meet your customers. In any case, find reasons why your customers will want to come to your store and make it fun and convenient for them to find the things that they need. Remember, the more closely you connect to your community, the more loyal your customers will be.

This is the first article in a continuing series on how small business owners can develop more customers and improve the loyalty of that customer base.

-Cindy Nemeth-Johannes