A couple of months ago, my family moved into a new place near the Old Airport Road hawker centre. We decided to have some interior design work done by the designer who did our last place.

Back then, it was a small set up with him as the lead designer. There were several other design firms with more experienced designers to choose from but we decided to take a leap of faith and engage his services. We had an excellent experience with him and even recommended his company to our friends. In particular, we enjoyed the personalised service and attention to detail.

A couples of years down the road, his company has grown and now has a partner who specialises in interior design for commercial properties. Going back to the company that did good work for us before should have been a safe choice yes? – Apparently not. There were problems with the designs, the technology was not updated and the attitude was terrible.

When we relayed our dissatisfaction to the partner, excuses came flying out and nothing changed. When we brought this up to our first designer, they vehemently defended each other and pushed the blame to us. The exchange reminded me of the battle of Helm’s Deep from Lord of the Rings where the Aragorn and gang defended Helm’s Deep from Saruman’s army of Uruk-Hai. The designers’ determination and effort put into defending their actions was commendable. Of course this would mean that I am Uruk-Hai and they get to be Legolas skating down the stairs shooting arrows.

In response to the crappy materials and shoddy workmanship, a simple “I don’t think we can work with each other anymore.” was their final response. At this point, we were 70% into the entire project, no designer would continue the job from there! We could either stick to our guns and end up with an incomplete house or settle for crappy work and at least get the place done.

This got me thinking. How do small business compete with the big boys? What can they provide that gives them a competitive edge? It turns out that there are only two.

1. Superior customer service and experience

The distance between the decision makers and the customer in a small business is shorter than that in a corporation. Customer service is not just about being nice or succumbing to every request made my the customer. Superior customer service involves understanding your customer’s needs, not from your perspective, but from theirs. For example, telling the customer in a polite manner that something cannot be done because it is against company policy isn’t good customer service. Understanding why the customer made the requests in the first place, making a case to management and following up with the customer is.

Sometimes consumers cannot tell the difference between two products. Most of a consumer’s perceptions of a product or company stems isn’t rational. Some people will buy Coke over Pepsi regardless of how many times Pepsi claims to taste better. Some people will buy Apple products even if it is more expensive than comparable products elsewhere. You can’t objectively scale a product’s visual appeal from 1-10 because it is too subjective. In the end, people make decisions based on perceptions and if you as a small business don’t value your customer’s needs, someone else out there will.

2. Innovation through understanding

Generally, large corporations push products. They have a process of research, product development, testing and finally after many levels of approval, get brought to market. Small businesses, on the other hand, tend to shape their product according to the needs of the customer. Or at least, they should. As a small business, you have the luxury of getting to know your customers. There is no need to spend thousands of dollars on market research, just spend a few minutes asking your customers what you want to know.

Some people claim that innovation is expensive and they don’t have a budget to pursue it. Others claim that it is a luxury that small businesses cannot afford. I disagree. Innovation can be seen as “doing something in a manner different from existing ways.” The mere action of improving upon a product or service offered by your small business can be considered innovation. After all, you need to provide your customers with a reason to buy your product! As a small business, you don’t need to submit a 100 page proposal to management to propose a change or improvement in your product/service, you just need to shout across the room, figuratively speaking. Keep asking yourself why would your customer choose you over others and if you can’t give a satisfactory answer, then maybe it’s time to rethink your business proposition.

In the end, your customers are everything. No customer = no sales = no revenue = no cash flow = dead business. Maybe it’s time to change how you treat your customers. Let me know what you think.

-Terence