Shep Hyken's Customer Service Blog

Six Strategies to Compete In Business

This article started out to be about how the little guy company can compete with a big company.  Specifically, in a recent interview I was asked how a small local business can use customer service to compete when a large national competitor, known for aggressive low pricing, comes to town.  As I wrote out the answer, I realized that the business strategies used by a small company competing against a big one are actually sound strategies for a company of any size.  By the way, customer service is important, but in this situation, there is much more to consider.

A “Big Box” store, such as Home Depot, Lowe’s, Costco, Sam’s Club, etc. comes to town.  Local businesses get nervous. How can they compete with the “everyday low prices?”  How will they hold on to their customers?  How will they attract new customers?  After all, they don’t have the advertising budget, the inventory, the buying power, etc. While there is some reality to all of the concerns that a local or small business might have, they are really just excuses.  Plenty of local and small businesses flourish, long after one of these larger stores move into their territory.

Now here is the reality of the situation.  It doesn’t matter if it is a major chain store, a big-box store, a discount store, etc.  And it doesn’t matter if it is a small or local business.  It doesn’t matter what type of business or industry.  Any type of business that moves into your area, large or small, will pose many of the same competitive threats.

So, what can you do?

1. Decomoditize your business.  A business gets caught in the commodity trap when they sell the same goods and services as their competitor, and other than price, the customer doesn’t see a compelling reason to do business with one company over the other.  This is where customer service becomes the strategy of choice.  A company can distance themselves from the competition with customer service that provides an obviously better overall customer experience.

2. Sell something that the competition doesn’t.  There is a small hardware store just down the street from a Home Depot.  They are always busy.  The reason is because they figured out what they can sell that Home Depot doesn’t.  And, the Home Depot store will actually refer business to them when they don’t stock the item a customer needs.

3. Find out what you do best and let the customer know. Why should someone do business with you instead of the competition?   Outside of the customer service you hope you are known for and the different goods and services that you might sell, is there one thing that really separates you from your competition?

4. Be active in your community.  Be visible.  For example, some of my Ace Hardware clients allow kids raising money for charity, sports teams, etc. to sell their candy bars, cookies, etc. outside of their store on Saturdays, endearing themselves to their community.  By the way, this doesn’t have to be a local community.  The company’s market defines the scope of the community, which can be local, national – even international.

5. Build an army of evangelists.  Use your happy customers to help promote your business.  Be actively engaged with them through social media, mail and any other form of communication that is appropriate.

6. Have a loyalty program.  Consider a formal loyalty program that gives incentives to do more business with you. (Like the airlines, hotels and restaurants do.)  Or, just deliver amazing customer service that makes the customer feel so special that he/she wouldn’t consider doing business with anyone else.

There are dozens – even hundreds – of strategies that could have been mentioned.  These six came to mind as no-cost or low-cost competitive marketing strategies.  Are there any others you can think of that you would want to add to the list?  Post them on my Facebook page at:  I may include you and your ideas in a future article.

Shep Hyken is a customer service expert,  professional  speaker and New York Times bestselling business author. For information contact (314) 692-2200 or For information on The  Customer  Focus™customer service training programs go to Follow on Twitter: @Hyken
(Copyright ©MMXII, Shep Hyken)

  1. Great tips. Love the section about distancing your business from competition by ensuring superior customer experience. Would like to add, though, that brand building is critical. It’s part of the total customer experience, and an important factor in employee retention. Both are important for sustainable success.

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