Small businesses don’t have the luxury of huge advertising budgets, large teams of marketers, developers, product managers and sales staff and all the other benefits of scale enjoyed by large multi-national corporations.
However, bigger isn’t always better and as the world moves further into the digital age, and consumers require unique, personalized experiences, small companies are likely to increasingly challenge larger, more inefficient and less customer-focused organizations.
Here are just some of the ways in which SMEs can take on these global corporate behemoths.
Employ digital experts
Despite what they claim, the majority of senior executives of large corporations aren’t particularly savvy when it comes to digital. For instance, a recent survey carried out by Research Now on behalf of the Management Consultancies Association reported that while senior executives understand the importance of digital to their business, their understanding is largely superficial.
When quizzed on what digital is, a bewildering array of explanations were given. One board member suggested that digital was “anything with a chip in it”. Another thought is was “anything done with the fingers”. A third described digital simply as “automation”.
Because senior executives don’t understand digital, they don’t take ownership and miss out on opportunities for their firms to become digital leaders. Yet, over 90% of them claimed to understand digital very well.
As the world becomes more globalized, having a coherent digital strategy in the regions in which your organization operates is key to success, both locally and internationally.
So while big companies rest on their laurels, riding on the successes of outdated approaches which are becoming less effective, SMEs can begin to challenge them in ways they’ve not been challenged before. By employing staff that understand digital commerce, your company could begin to successfully compete with your larger competitors online.
Develop a localized plan
Winston Churchill famously said “He who fails to plan is planning to fail.” Having a clear plan in place will allow your organization to define specific, realistic goals and objectives consistent with your company’s mission. It will allow you to communicate these objectives clearly to your staff, allowing them to focus their resources on key business priorities.
The key to developing a successful strategy lies in having access to the right data. Organizations with access to the right information at the right time have the power to transform themselves into successful market leaders while companies that don’t have access to accurate and current information risk taking unnecessary risks that may undermine expansion and profitability.
Often, large brands don’t plan their international expansion programmes with due care and attention. For example, when Groupon attempted to enter the Chinese market they failed to research their market and plan accordingly – resulting in marketing tactics that failed to resonate with Chinese customers.
So, research your target market thoroughly and use the information to develop your plan and guide your decision making. But don’t religiously follow your plan if you find it’s not working or discover an alternative approach that delivers improved results.
Bigger organizations tend to be slower to respond to market conditions so your small to medium business may be able to react more effectively to the ever-changing business environment in order to deliver the goods and services consumers want more quickly than your larger competitors.
Partner and collaborate with local firms
One of the biggest challenges small companies face when attempting to expand globally is access to the required resources. The process of going global requires a level of investment that smaller companies typically do not possess. One way of getting around this is to develop partnerships with local companies who not only have the resources but also possess a deep understanding of local culture and market conditions.
Many large companies try to maintain their independence when launching their brands on the global stage, often with dire consequences.
For instance, in 2006 Home Depot tried to enter the Chinese market but was forced to retreat in 2011. The American retailer of home improvement products blamed the fact that they misread the country’s appetite for DIY. “The market trend says this is more of a do-it-for-me culture,” a Home Depot spokeswoman said of China. By partnering with a local company, Home Depot could have taken advantage of the local knowledge and resources to deliver a successful strategy to reach Chinese consumers and saved a lot of time and money in the process.
Develop a unique online value proposition
Unless your brand is launching a unique product which is protected by international patents and unavailable elsewhere, then there are likely to be local competitors that are already established in your sector. Only by differentiation will your brand stand out from the rest.
Big companies often rely on their success in local markets to fuel their growth abroad, ignoring the cultural nuances of the target region and not benchmarking their offering against local competitors.
So, think about how your product or service is different from your competitors and try to articulate this in order to convince customers to choose your product or service over the competition. Small businesses can rarely compete on price with larger competitors so be careful not to rely on price as a differentiator and instead focus on quality, value and service.
Listen and learn
It’s surprising how many large organizations simply don’t listen to their customers and learn to adapt to market conditions. AOL, Kodak and Nokia are just a few examples of large companies that failed to listen to their customers and suffered from huge drops in market share, revenues and profits.
SMEs need only to look at way that these companies ignored obvious the facts on the ground regarding changing consumer behavior to know that the ability to adapt is key to success. So, aside from listening to customers by asking for their feedback, companies should embrace agile development so that they’re able to respond quickly to rapidly changing market conditions.
Whether you’re targeting an individualist or collectivist culture, customers always tend to respond much more positively to messages that are personalized. By targeting the right customer with the right message, at the right time, brands can enjoy increased brand awareness, better customer engagement, increased customer loyalty and higher retention rates.
Large brands may have the tools, such as enterprise CMS systems that include recommendation engines, personalization and marketing automation software, but often rely too much on them, often with hilarious and embarrassing consequences – depending on your point of view.
For example, WalMart caused offence in 2006 when its retail website directed potential buyers of “Charlie and the Chocolate Factory” and “Planet of the Apes” DVDs to also consider purchasing items with African-American themes.
Amazon also caused a stir in the UK in 2013 when it suggested balaclavas for users who were looking to buy baseball bats.
So, SMEs should personalize their offering but be wary of complete automation when it comes to product suggestions and other types of personalization.
Expanding into new markets around the world can seem like a daunting task, even for the more established brands. But social media can facilitate a move overseas without firms even having to set foot in another country.
However, for brands to be successful using social media, it is important that their social media fan or brand pages are translated into the local language and that community managers are native speakers of the local language. A cultural or language mishap on social media is likely to travel and cause embarrassment – reducing consumer trust in your brand.
Don’t forget mobile
Some businesses in developed markets aren’t only thinking about desktop-first when it comes to online strategy – many are still desktop-only. Research from early 2014 found more than a quarter of US businesses still had no mobile strategy in place.
Even social media giants such as Facebook have been late to the table when it comes to mobile: this summer COO Sheryl Sandberg admitted that the company made a big mistake in underestimating the impact of mobile. This failure to grasp the significance of the mobile audience meant that Facebook didn’t tailor its site and advertising for smartphones and tablets until as late as 2012.
SMEs should ensure that they are mobile optimized and in countries where smartphones are the dominant connected devices, should consider mobile first design on their websites in order to reach local consumers.
It’s been said that culture eats strategy for breakfast. Because of differences in culture, a company’s best laid plans can often fail when it comes to expanding into a foreign territory.
If you find that your localized plan fails to deliver the results you’d hoped for, then you’ll need to change direction. Larger companies find it very difficult to alter course once they’ve started on their journey – so use your size and agility to your advantage.
By adopting agile processes and creating a culture of testing and optimization, your business should be able to adapt to the changing conditions within your target market.
Don’t just translate….transcreate and localize
Last, but by no means least, you should always ensure that your content is translated with the preferences and behavior of local audiences in mind.
Larger brands with huge product catalogs and websites with millions of pages often select the most cost effective options for translating their content. You’d be surprised how often these brands opt for machine translation rather than crafting their messages with the target audience in mind.
So, by opting for transcreation rather than literal translations, SMEs may be able to surpass their larger competitors in engaging customers in foreign markets.
However, firms need to be quick to react. There are a few example of larger organizations which are recognising that a local approach to business can be more effective than a global one.
For example, Johnson & Johnson recently announced that it’s decided to move to a “hub and spoke” system for its global brands whereby local teams have more control over marketing campaigns intended for the regions that they are responsible for.