Your small business does not have to scale; in fact, there is a lack of scale advantage for small business. You read that correctly. If your core product or service doesn’t scale well or easily, you can count on keeping much of the competition—who are often focused squarely on scale and profits—away. While scalability of your internal processes and technology is key to your brand’s success, by focusing your business on areas of customer benefit that do not scale easily for the competition, you can more easily create a moat around your brand.
I learned this lesson years ago, as a business journalist covering the automotive retail sector. I had a question that would not go away: How could Toyota, at the time on the way to become the world’s largest automaker, miss out on the full-size truck market? It didn’t make sense that one of the world’s top brands could miss the boat so badly, refusing to offer a full-size truck in crew cab, which at the time was hugely popular.
Wanting an answer, I visited one of the top Toyota dealers in the area.
The lack of scale advantage in action
Jerry Gray, the general manager of a Toyota dealership in northeast Georgia, had to endure an endless stream of complaints from his customers, all of whom wanted the same thing and wondered how the big brand was missing it.
“Why the hell doesn’t Toyota make a true crew cab?” asked one disgruntled customer, a Toyota loyalist who’d grown tired of waiting for the company to step up and offer a true full-size, four-door truck. “It makes no sense when everyone else has a true crew cab or crew cab max. You’re losing customers. That’s what you’re doing.”
I was at the dealership to interview Gray regarding the then-just-released sales figures for nationwide auto sales. As I was waiting to interview Gray in his office, I talked to one of his managers.
I asked him the same question countless customers were asking.
“Look, we realize Ford, GM…Dodge owns the truck market in the U.S., especially among people who ‘need’ a truck for work,” he said. “But most would-be truck buyers don’t buy them because it’s a must for work. They buy them because they want a truck. That’s the majority of truck buyers. So, instead of going head-to-head with Ford and them, with a truck that’s not really what that core market wants or needs, we’re going after the folks who want a truck, but who don’t have to have the highest tow rating, the biggest engine, the most horsepower… We’ll get there, but that’s not the goal yet. Toyota knows what it’s doing.”
This encounter served as the wellspring for a concept that I’ve continued to refine over the last decade: Go where the competition isn’t with a product they can’t or won’t compete with.
The lack of scale also means the lack of competition
In my nearly two decades of either covering business as a journalist or being in business as a consultant, I’ve seen dozens of businesses rise to success, in large part because they chose to focus on things that did not scale.
Two popular examples include:
- Zappos: uber-personalized service
- Patagonia: sustainability and being a good corporate citizen
Both brands can credit a large portion of their success to the strategic positioning of choosing to carve out niche’s that would be economically infeasible for competitors to best them on.
Which brings us back to Toyota.
Sure, Ford, Chevy and Dodge offered smaller trucks with comparable fuel economy to that of Toyota’s Tundra. But most buyers of those brands were hot on the F-150, the Silverado and the Ram, respectively, all of which are full-size trucks. Toyota would have been dumb to play that game before they were ready. So they didn’t.
They focused on their bread and butter:
- Constant improvement (which they used to perfect the first-generation Tundra before going upstream with a true full-size offering)
Don’t play the competition’s game
The great thing about making the competition chase you is that it works for any brand, in any vertical.
Instead of chasing the competition’s tail, we should make them chase ours or, better yet, force them to compete on grounds most favorable to us.
How content marketers and digital marketing agencies can use the lack of scale advantage
Sometimes I think if you ask digital marketers any question, the answer will always be “SEO.” For those of us who make our living with content, SEO, CRO and whichever other acronyms you can think of, that’s all well and good.
But the businesses we work for care about one thing: conversions, or sales.
We like to think we have the “best SEOs,” the “best SEO strategies” and a “track record of working with the best brands,” as if that’s what really matters. At the end of the day, what matters is the work we do for our clients, but we can only do that work if we can convince our clients to stick around long enough for us to do it.
If your digital marketing firm desires long-term success and a protective shield of sorts from the competition, make client services the hallmark of your business.
Become high-touch, reaching out to clients often for updates, a brief chat, or to just say hello. Long-term business relationships are about the relationship first, and then the work. You’ll find that clients are a lot more forgiving of delays, errors or minor differences if you foster a rapport that goes beyond words and data.
That’s exactly what Wil Reynolds of SEER Interactive in Philadelphia, Pa., has done. Reynolds sets his agency apart by what he calls out-caring for clients. That is, he makes it his charge to obsess over any and all of the elements that matter to his clients and their businesses. The result? He now has offices in Pennsylvania and California and does more than $25M in annual revenue.
People are far likely to forgive a business they have come to trust and see as a partner. The sooner we accept that relationships—not the work itself—drive businesses, the better off we’ll all be.
Small business owners can find success by forgoing scale and getting off the content hamster wheel
You’ve been told that to compete with the other business in your arena, you need to produce more content, more often. Don’t find yourself on the content hamster wheel. Yes, more content more often is likely to be sound advice, especially if you’re going up against competitors who’ve adopted the “brands-as-publishers” mindset.
However, isn’t publishing more content, more often playing right into their hands? What happens if they choose to do the same and do it just as well? Your goal must be to zig where they zag, competing away and around them as you strengthen your business.
Instead of focusing on writing a post a day or four posts a month, focus instead on producing quality content, not frequent content.
What I’d like to see more businesses adopt is what I call the-best-idea mindset, whereby they approach content production from the angle of (a) what can I execute well? (b) What will set me apart? and (c) What will get me noticed by my target audience?
I’ve advised two approaches to small and midsize businesses:
- Focus on content depth. Find the piece of content in your vertical that ranks highest in organic search. Read it, analyze it, then hire a quality freelance writer or subject matter expert (SME) to create a similar but deeper piece of content. Maybe the piece of content you find is a guide or checklist which has been shared and linked to hundreds of times. Note the obvious weaknesses, then have your writer attack those areas in the new document.
- Focus on content themes. Instead of creating a certain number of blogs a week or month, it might make more sense for your business to concentrate on building out a base of content around certain content topics (e.g., something related to your brand that would appeal to prospects) or content types (e.g., blogs, videos, etc.). Content themes make it easier for your brand to create quality content with frequency. Not only are prospects and customers aware of what to expect, but your content team is better able to knock out high-quality content owing to the benefit of repetition.
The key is to think thematically as opposed to creating one-off pieces of content that may or may not do you any good.
Your priority must be creating the best experience
If nothing else, we muss lose the one-size-fits-all approach to content that keeps us all going down the same rabbit holes. A far better approach is to focus the bulk of our energy on creating the best customer experience for everyone who interacts with our brands. That’s only way to ensure you’re at least ahead of much of the competition, many of whom will be solely focused on scale. Use the lack of scale to your advantage. It can always become a priority later.