SMBs can deliver great customer service on a budget

Friday 11 January 2013

Small and medium-sized businesses (SMBs) need to capitalise on every small advantage as they bid to compete against much larger and better-resourced enterprises. With national and international corporations benefiting from economies of scale, SMBs are hard-pressed to match them on product variety and price. But they can target consumers in other ways, tapping into their psyche and focusing on delivering a supreme customer experience.

Price tends not to be the sole motivating factor when customers purchase goods and services. Very often, buyers are looking to do business with a provider which values their custom, and makes every effort to meet their individual needs. Large companies, which often have standardised, rigid processes stemming from central HQ, are not always able to deliver in this respect.

SMBs however - with their smaller scale and more streamlined decision making function - are uniquely positioned to deliver on this front. Very often, it is the business owner or majority shareholder who deals with prospective clients, and as such, they have much more scope to be flexible. It is their company, and they can make key business decisions on the spot. This agility is a key characteristic of small business operations - and it can be one of SMBs' biggest strengths.

The importance of being agile

In order to be successful, companies need to be proactive. Business leaders need to have an awareness of what is happening in their industry and sector, and be able to anticipate future trends. If they can establish a demand for goods and services before their rivals, and act upon this foresight, SMBs can bring new offerings to market ahead of the field. This gives them the opportunity to establish stronger brands and secure customer loyalty for the long term.

But at the same time, businesses also need to be reactive - or at least have the systems and processes in place to respond to needs as they arise. For instance, a client may approach an SMB with a particular need, seeking a solution from a service provider. This may be outside the company’s normal field of expertise, but be in a related field. By using pre-existing skills and knowledge, the company may be able to complete the project and, in doing so, extend its product or service range.

Equally, businesses may be invited to compete for a contract by bidding against other organisations. Flexible businesses, which can demonstrate their capacity to evolve and develop new solutions, can win new business through such tender processes. Rather than customers coming to them, SMBs can take their own offering to the client. SMBs may even be able to out-pitch larger companies if a project is particularly geared towards their strengths.

Are SMBs willing to embrace change?

Some aspects of a company's work - such as production processes for long-established goods - may remain the same year-in-year out. Small changes over time may improve quality or introduce new features, but essentially, companies stick to what works. The same logic can apply across organisations, whether in marketing, sales, finance, administration or HR - if a particular area is performing well there may be no need to make major changes.

But SMBs also need to recognise the importance of keeping up with innovation. By failing to embrace change, companies gradually lose ground on their rivals - and this ultimately costs them trade. Ignoring the opportunity to make minor upgrades may see the SMB fall significantly behind over time and become uncompetitive in the long term. If a rival is able to deliver the same goods or service at a lower price - or with a better customer experience - why would customers choose to deal with your company anymore?

As such, SMB leaders should constantly be on the lookout for areas where they can make improvements, however small. For many SMBs, IT is an obvious starting place, given the immaturity of the systems and solutions in use at many small firms. Very often, the technology arm of the business extends no further than a couple of desktop PCs and an internet connection - but this needs to change. With more and more firms moving online, it is becoming increasingly difficult for businesses to compete unless they harness the power of technology. Unless firms are prepared to invest in IT, they can no longer remain at the head of the field.

Capitalising on technology

The use of modern IT solutions allows SMBs to be agile, forward-thinking organisations. They can use a variety of software and hardware solutions to automate menial processes, and free up employees to focus on areas that add value. For instance, rather than spending all day working through the figures, companies can use spreadsheets to make calculations in a fraction of the time. Or they can use analytics software to gain insight on company performance against a range of indicators, and take advantage of online communication methods to engage with clients, partners and the general public.

Being active over the internet also enables firms to tap into ecommerce markets - a major growth area in almost all areas of business. Customers want to order goods and services online rather than in physical stores or outlets, and SMBs need to be able to meet this need. As smaller enterprises with fewer people, offices, manufacturing sites and other physical assets, it should be much easier for SMBs to re-shape their offering to react to this cultural shift. They are less likely to find themselves saddled with retail outlets, production units and staff they no longer need - and the costs associated with getting rid of them. SMBs can simply allocate their resources as appropriate, responding to demand and meeting the needs of their paying customers as applicable.

Using the cloud to become more agile

The advent of cloud computing in particular is making a difference. Whereas in the past SMBs could not afford to invest in advanced IT solutions, the availability of hosted software, platform and infrastructure has opened new doors. Small companies do not require ownership of IT to benefit from technology tools - they can simply access services delivered over the internet by a third-party service provider. The consequence is that SMBs can use the same IT solutions as larger companies, which historically would have had the clout to pay for them outright. The shift from the capex to opex investment model is benefiting them too, but not to the same extent as SMBs. These companies, the smaller firms with the fewest resources, can build a service offering around IT solutions that five years ago were well beyond their reach.

With more sophisticated technology at their fingertips, SMB leaders can eliminate costs across their enterprise, increase employee productivity rates, trade online to a wider audience, make more educated decisions and optimise service quality. IT enables them to be flexible, agile operations, which can channel their resources into a specific area of expertise. While SMBs will never be able to offer the same range of products or services as their larger rivals, or even offer the heaviest discounts, they can deliver quality, professional services which belie their size and scale. And when new opportunities emerge, they can be the first to react, putting the traditional market leaders under greater pressure.

Posted by Jenny Arthur