According to the feedback we receive from our members here at the Federation of Small Businesses, adopting a more personal approach can put SMEs ahead of the rest. Large firms may seem intimidating to their smaller rivals, but bigger is not always better.
For this reason, SMEs are continuing to flourish in the current business environment, despite the presence of major players in most industries. In order to retain their share of the market, SMEs must work harder, especially given that they have fewer resources than their larger competitors. While this may seem to be a disadvantage, it can actually work in their favour. The services offered by SMEs may be far more personalised and bespoke, with more time assigned to ensuring that each customer receives exactly what they need.
Although big businesses are at an advantage when attracting customers, it is SMEs who are in a stronger position when it comes to client retention.
Attracting clients is harder work for SMEs, who are not always able to offer competitive prices or to allocate substantial marketing budgets. However, SMEs generally attribute more value to each customer, working harder to retain their custom. Having a smaller list of clients allows SMEs to devote more time to each one, getting to know them and their individual requirements. SMEs thus tend to have a more in-depth understanding of their clients.
Larger firms who attract a lot of customers may be forgiven for seeing more complex clients as time consuming and unprofitable. After all, several simple requests can be fulfilled in the time it could take to satisfy a more difficult one. SMEs can capitalise on this weakness in larger corporations. Clients very much appreciate it when a company has demonstrably gone the extra mile. In the long term a close and profitable business relationship will invariably develop.
Experience here at The Federation of Small Businesses suggests that the idea of working with SMEs is becoming increasingly popular with clients from all industries as they come to realise the advantages of doing so. Clients understand that SMEs are more likely to provide a customised service. They appreciate the fact that personnel will have individual knowledge of each client, as opposed to simply being a 'faceless' name in their database. They are also likely to work with the same representative or group of representatives throughout the engagement, rather than with a range of different agents. How many of you have had dealings with so-called account managers who have little knowledge as to who you are, or what your organisation stands for? The consistency inherent in SME staffing can save clients a great deal of valuable time in the long run as there is no need to repeatedly spell out their requirements every time they contact the firm.
With an increased awareness of the value of each customer, closer relationships and just more time for each client, there are advantages to having a smaller foot fall than your larger competitors. These strengths attract clients and assist in retaining them. While having more clients is almost always an organisational objective, it is important to look after the ones you already have. Don't forget, a loyal client, who also goes on to recommend you to friends and colleagues, is worth considerably more than several one-off transactions.
If your business does expand and becomes a larger corporation, it is important to remember how you operated as an SME and to continue to apply the same principles of customer service. You may be forced to compromise along the way but try to retain those close customer relationships insofar as you can.