Small Business

David vs. Goliath, the Rematch


By Michelle Nichols Have you ever lost a sale because a prospective customer favored a larger competitor just because of its size? It's a problem almost every small business faces at some point. So I asked some of my David-sized readers for their solutions to fighting Goliath competitors. Here are some of their nuggets of wisdom:

Daniel Krohn, a lawyer from Houston, advises that the problem is largely political. "It's safer politically for an individual with a large company to buy from a big firm. Here are four ideas to counter that. First, point out that, ultimately, an individual at the big firm is going to do the work, not the whole firm. You are more qualified than, or at least as qualified as, any of the other firm's individuals."

He continues: "Next, remind them that as an individual, you're more nimble, and therefore can deliver on schedule. Also, you can assure them that when you're doing the job, they know they will always be getting an experienced professional they know personally. Finally, you might be able to operate more efficiently and beat your bigger competition on price."

Reuben Swartz, president of Mimiran, an Austin-based pricing-strategy company, believes people have a self-interest in any potential transaction. "Buyers are often less concerned with your true credentials than with what will happen to their careers if something goes wrong with the project. As the saying goes, 'No one gets fired for buying IBM.'"

Reuben adds: "Remember that if you're dramatically under-pricing your larger competitors, buyers may perceive you as a higher risk. Crazy as it sounds, sometimes a higher price gives greater comfort."

Chris Philippi, a retail expert from Rochelle Park, N.J., suggests appearing larger than you are by building affiliations. He writes: "It appears to me that this is more of an image problem than a sales problem. I'm an independent consultant. However, I never let on that I'm a 'one person band.' For starters, I always use the words 'we' and 'us' over 'I' and 'me.'"

Careful branding, Chris adds, can be even more important for entrepreneurs. "For my first company, I used my last name -- Philippi Marketing & Associates. However, I was concerned that it made my company look too small. Since then, I started a second business with a company name that appears much larger -- Windfall Profits Group. Plus, it actually says precisely what the client can expect from using 'us.'"

Robin Ghosh, a sales trainer from Perth, Australia, puts a different twist on this idea -- building partnerships with like-minded entrepreneurs in the same industry, to help create a global operation of sorts. "I have an office in China through my associates," he says. "You too can have many strategic alliances around the world!"

Shari Savage, a photographer from Fresno, Calif., recommends developing strong referral skills in your customers. "Competing against larger competitors can be a foot-in-the-door problem: I do a heck of a job for my existing customers, and then I don't hesitate to ask for a personal phone call from my customer to the right person -- and I always get it."

Another strategy, courtesy of John Vaughan, a loan officer in Sun City, Ariz., is to build credibility through becoming a published industry expert. He advises: "It's not a quick way to go, but the most durable. All the magazines in your trade groups are eager for gutsy articles about the facilities, processes, and people of the industry. If you're an expert, then articles, analyses and opinions will make you the go-to guy. Soon you may have the opportunity to be in one of the bigger competitors' organizations as a valued partner."

Jason Koch of Katy, Tex., took that idea one step farther, recommending that you try to write a book on your area of expertise, especially if your competitors haven't penned their own. "You could also perform and sell your research and market data to other industry specialists," he says. "This would supplement your revenues and expand your name recognition."

One last strategy is based on the philosophy that, if you can't beat the large firms, affiliate with them. Carl Taggart, a financial services salesman and consultant from Kennett Square, Pa., says he decided to affiliate with several of the Goliaths in his industry. He writes: "I act as an independent contractor, so there's little cost to the big firms. The fees are lower than I might earn on my own, but the work is issued by the bigger firm, and I have reduced my personal exposure. The result is that I almost always get called in when they get the job, and I still have my own clients."

Carl continues: "There are several benefits to this type of relationship -- you remain independent; you can have the clients request your participation on certain engagements; and when the client feels compelled to go with a big-gun firm, you may end up with work that you may have missed."

He adds a wild twist: "You can give the client several names to request competitive quotes from, all of which are planning to subcontract the work to you. In the end, you may get the work regardless of which big firm they choose."

As Sally, the Peanuts character, used to say, "All I want is my fair share." I hope this column has given you some ideas how you can get your fair share -- or more than your fair share -- in competing with the heavy-hitters. And if you have your own methods, please e-mail me. There may just be a Part 2 to this column. Happy selling! Nichols is a sales speaker, trainer, and consultant based in Houston. She welcomes your questions and comments. Visit her Web site at savvyselling.com


Steve Ballmer, Power Forward
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