August  2003      Vol. 12, No. 8  REAP HOME PAGE  A publication of the Center for Rural Affairs    
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Competitive Business Strategies to Survive and Thrive
Customers buy on perceived value, not just on price. Large retail chains can't match the individualized service of a small business.


Competition is normal in any small business, and, as in any rivalry, one first has to learn the strengths and weaknesses of one’s competitor. If that competitor has an overwhelming advantage in one area, don’t take them head-on in that area. For example, don’t try to compete with Wal-Mart, K-Mart, or any other discount chain on price as your chief strategy. Instead, look for places where you can possess a comparative advantage. Build on your strengths. Local businesses can and do compete successfully with an array of others.

Find your comparative advantage
You can target customers much more precisely. All customers, in the end, buy on perceived value, not price. For a growing number of customers, quality is as important as price, both quality of service and product quality.

Being able, if disciplined, to truly individualize quality service to each customer is important. To know each customer personally – their likes and dislikes, their birthday, their granddaughter’s scoring the winning soccer team goal – counts to many customers.

Successful retail strategies
Ed Rigsbee, President of Alliance Works in California and a well-recognized business consultant has an excellent series of retail strategies available on his website, .

Rigsbee offers information on his site under headings such as partner selling, building a retail success triad, eliminating a customer’s emotional obstacle to buying, finding a retail niche, community partnering for greater retail success, and showing customers just how much you value them.

Specific tips gleaned from these areas include:

  • Find niches with unique service or product offerings that don’t offer enough volume sales or require more personalized service to sell successfully. Giant retailers shy away from these types of enterprises.
  • Commit yourself to more in-depth business planning, more upgrading on information technology.
  • Search for supply and marketing alliances that fit your business to lower marketing costs and increase sales.
  • Greet each customer who comes into your store within 30 seconds. They’ll recognize the significance of the actual business owner taking time to do this, especially if you take time to know all your customers well. Can Wal-Mart do that?
  • Sponsor a fun event raising money for a local cause, at your business site if practical. Your community will recognize the commitment of an actual owner being there vs. a hired manager of a large chain.
  • Define how your store is truly unique and special.
  • Commit yourself to being a truly caring partner to your customer. You are in a unique position to be able to individualize to each customer, and that gives quality.
  • Re-visit your business plan, update it, and comb your financials for clues to decrease costs, identify product lines that have great profit margins, and boost sales.

Remember the key to your survival is to ask questions
Ask yourself these questions every day. What is truly unique about my business? What can give me a comparative advantage over large corporate retailers such as K-Mart or Wal-Mart? What can I offer a customer that has enough perceived value to entice him or her to spend money on my products instead of theirs?

Public policy influences your business survival

Another survival strategy is to become more informed about public policy issues impacting your business future. Whether it is issues of who receives tax incentives to locate versus who doesn’t or the total impact of location of giant retail centers in your area, public policy has a huge impact on the local business climate.

Search the Internet to find out what some rural towns have done to combat the demise of small rural business districts resulting from the location of large retail chain stores. Educate yourself and fellow business people about public policy options that could impact your survival.

Retail Chain Myths

Myth: Luring Large Retail Chains for Economic Development Creates the Greatest New Job Growth

Fact: Over 51 percent of the Gross National Product (GNP) is generated from small business. They employ 58 percent of the private work force and generate between two-thirds and three-quarters of new jobs.

Myth: Always the Lowest Prices

Fact: The local newspaper in Carroll County Arkansas conducted a test on Wal-Mart’s low price claim. They surveyed a list of 19 common household items at six Wal-Mart stores over a 30 day period. Wal-Mart was the cheapest for only two of the 19 items.

 Contact: Phil Menke, with questions or comments.
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