As countless brick and morter small business owners fish for ways to survive a whirlwind of sluggish sales, creeping inflation, and economic uncertainty, many may be making decisions that are actually hurting their companies.
According to a recent survey conducted by American Express Open, the majority of Americans seem to realize the value of small businesses in their communities and the role that small businesses have in the economy as a whole. Many even appear to be putting their money where their mouths are. According to the survey, many respondents spend a significant amount of money at small, local establishments- some 33 percent of their discretionary income or about $100 a month at their favorite business.
So why are small businesses hurting so much? With less discretionary income consumers may have little choice but to cut back on spending and have subsequently become focused on getting the best bargains. Though some may still frequent their local shops, the discounting offered at big box retailers and other bigger companies may be pulling others away. A recent survey conducted by the National Federation of Independent Business (NFIB), revealed that small business optimism has been on the decline over the past five months. Weak sales and overall challenging business conditions remain chronic concerns.
So what can you as a small business owner do? First realize that you will probably not be able to compete with your bigger competitors on price. In fact many of those bargain-hunting customers may be less likely to remain loyal in the first place. It’s why group deal services like Groupon often prove unsuccessful for smaller businesses.
But as a small, local business you can compete on personalization, creating value, specialized customer service, and building a face-to-face community (not just an online one). In short, you need to leverage the community aspect of your business. You want to preserve your current loyal customers and reign in any of those on the fence people- those who would be loyal but who are currently facing hard times. You need to show your customers how your business saves them the time and money they are trying to conserve by running after the latest or greatest discount or how you can offer them something they just can’t get at a big-box retailer.