How to compete with big businesses – David vs. Goliath mentality

How to compete with big businesses is a common fear that lots of small to medium sized businesses hold (especially in established markets). That fear that they will never be able to compete with the ‘big boys’ (big budgets, established brand, millions of followers, glitzy events, constant advertising – you know the type).

It’s quite easy to fall into the trap of thinking that you can’t and never will be able to compete if you’re a business that is dwarfed by the numbers of the ‘big boys’. I’ve lived on both sides of the fence and often share my experience of corporate life with SME’s to help them understand that there are ways to get a competitive advantage irrespective of the size of your business – especially if you can understand a few of the challenges that large businesses have to cope with.

The title of this post is in homage to Malcolm Gladwell who of course wrote the book of the same title and it’s one of the most relatable analogies to use when tackling this subject. In this interview, Gladwell highlights that ‘it is because of, and not despite, David’s size and unorthodox choice of weapon that he is able to slay the lumbering giant. In other words, most people underestimate the importance of agility and speed.’

SME or Startup businesses are often blind to the things a large company struggles with because they haven’t ever worked in similar places themselves. By recognising those weaknesses, their levels of confidence and more importantly opportunities can vastly increase.

There are lots of examples I could share but here are a few based on my own experiences:

 

Brand

Perception is everything.

Potential customers have a sixth sense for a brand that is serious about what it does and the values and ambitions that it represents. Get your brand in the right place and use it consistently and inventively and businesses of any size can be in control of how they are perceived. There are many businesses I know who have invested in creating a brand that feels and acts like a global company. It gives a level of confidence to internal people and credibility to potential customers that can only come from being able to get behind a brand that represents everything you need to be a market leader (professional, confident, modern, trusted etc.). And we live in a world of curious people – a new good-looking brand on the block will get attention and consumers love a newcomer or underdog (more about that later).

Community

A vociferous community can be a strong ally.

If small businesses can grab and nurture the attention of a small band of customers into a community then the power of that voice can often be very strong – even if the community is relatively small. It’s amazing how noisy a focused and loyal set of followers can feel on social media, in PR or at events. This can be especially unsettling for big brands if that community is directly challenging the ability of a larger business to compete with the newly energized product or service of a smaller incumbent. Such unsettling tactics can be a very powerful ally when small businesses are looking to influence new customers or partners.

 

Sentiment

The underdog can be the people’s champion.

People love an underdog! It’s just human nature. And that’s why small/startup/scaling/disruptive businesses will very often earn the sentimental support of potential customers (especially when backed by a vociferous community). That doesn’t mean they’ll offer support just because you’re an underdog but if they get the product, service, pricing etc. right then you’ll get customers backing you because they naturally want to make sure that the big boys don’t get too comfortable in their big shoes. Think Aldi and Marks & Spencer. Aldi have got the product quality, price and service right (experience is even improving), despite being a bit of a joke when they first entered the market. Instead of being embarrassed, wealthy households are now willingly shopping there. More importantly they proudly tell their friends and often have a sense of smugness at getting one over the establishment.

 

Cheekiness

Be brave and challenging towards incumbents.

Small businesses haven’t got a 20-year legacy to protect so they can be a bit (or a lot) edgier! That doesn’t mean being reckless, rude, unconsidered or controversial. It just means you can be brave and take a position or tone that challenges (or playfully goads) the incumbent and encourages customers to get behind your cause. I’ve seen this work numerous times to the benefit of challenger brands because the established brand will always appear bitter if it retaliates (and it’s very difficult to stop junior/inexperienced front-line people in large businesses being naturally defensive). This kind of tactic can create and unsettling paranoia at a big brand because they know they will fall harder if they get it wrong and their reputation is far more valuable/susceptible to damage than a challenger. Smaller brands likewise have to be careful though. Without the right tone or carefully crafted messages, they can appear bitter or martyr like. And no-one gets behind a brand with that outlook.

 

Customer proximity

Use the strength of a close customer relationship.

Smaller businesses are very often much closer to customers than big businesses. This creates an authenticity and level of trust that doesn’t exist with big businesses. Your ability to understand what customers need is much greater because of that proximity. Most importantly, it’s how you use that insight and responding quickly with agility is something that is a strength over big businesses. I’ve been in a few situations where smaller competitors have delivered something to market that was either in the plans of the big business I was with or was nearly ready to launch – but as soon as you’re behind, you lose that edge and the advantage goes to your competitor.

 

 

Technology

Marketing technology has levelled the playing field for all brands.

It is right that big global businesses have seriously big budgets to invest in technology and systems to help them market their business better. They have scale so they can demand cost efficiencies and they have the influencing power to partner with the world’s best providers. But their size is their burden. They’re saddled with managing multiple legacy systems or getting different platforms to talk to each other or having super complex implementations/integrations that take aaaaages to build and test. Martech has come so far in the past 3 years that no matter what the size of a business, there is access to brilliant tech that will make a difference – especially if it’s about automating and personalising processes. Just pick platforms that will scale and talk to each other and SME’s can fly.

 

Agility

Large businesses have the agility of an oil tanker.

Taking technology as an example, SME’s can fly quickly because they can embed and see results from such technology much faster than a large business will. Much in the same way that David took advantage with his nimbleness, so too can smaller businesses. The ability to implement and change direction quickly and effectively is a powerful weapon. They can move fast and adopt new technology, processes, products etc. at a speed that larger businesses can only dream about. Big business leaders will, for example, very often have the right vision and strategy but their ability to implement it quickly is hampered by layers of employees or approval processes that means it can take longer to effect. Similarly, the ability to change the way things are done can be much more complicated to implement at scale – especially when doing it internationally.

 

Laser sharp differentiation

You must be different (or better) to stand out.

To take advantage of many of the above opportunities, SME’s must be hyper clear as to their unique point of differentiation or at the very least ensure they have a value proposition that is stronger than the competition and better meets customer needs. A relentless focus on this, coupled with clear positioning, purpose and campaigns that are laser targeted to the best customer segment is something that big companies struggle to do. They often have broadly diversified product/service ranges and their core messaging or reason for being has become foggy over time. That makes it difficult for customers to relate to and provides opportunity for SME’s to more simply and compellingly engage.

 

The above doesn’t mean that small businesses are always going to succeed. Far from it. There are numerous other things that also need to be right (people, finances, strategy, product etc.) to create the foundations for success. But the points above highlight many things that small businesses just don’t consider when they’re trying to grow or scale in the face of a large market leader. By adopting a ‘David’ mentality and understanding some of the above, smaller businesses can build a competitive edge that larger businesses can not directly compete with. And we all know what happened to Goliath.

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