As a small operator with only one or a few stores, it can be frustrating at times (maybe all the time) competing against the larger, better-financed chains with their economies of scale and internal resources such as training, marketing and store sales support. As a small operator, you have a choice -- throw up your hands in frustration or fight back.
Being small gives you a distinct advantage: speed and flexibility. It’s not the big that eat the small in today’s cutthroat marketplace; it’s the fast that eat the slow.
Get the Basics Right
Everyone is always looking for that silver bullet solution that will create a profitable and sustainable competitive advantage. There is no silver bullet. And if there were, how long do you think it would take for your competitors to copy? Consistently executing the basics is step one in creating a competitive advantage for your company. These basics are:
1. Competitive price.
2. Competitive hours of operation.
3. Great appearance.
4. Great service.
Consistently executing the basics is a lot like what football coaches talk about in their press conference following an embarrassing loss: "We need to get back to the basics." When it comes to the basics, the operative word is consistently. Having a competitive price and hours of operation, along with good appearance and service, will not get you a competitive advantage – these items are the price of entry; the ante to get into the game.
So, before you go chasing a strategy that will help you gain a competitive advantage and differentiate your business, get the basics right first. To help you remember the basics, think CASH: competitive price, appearance, service and hours.
Find Your Competitive Advantage
A key advantage you have over the larger convenience store chains is speed. Speed in decision making, implementing new programs, testing new concepts and changing direction. Larger organizations are burdened with a bureaucracy that all decisions must go through. Many layers of the organization have to be involved, review and sign off before they can finally get to action mode and implement at the store level.
As a small operator, you’re not straddled with this delay. Speed wins, and lack of speed kills. You have the ability to test all kinds of different customer-focused initiatives that can drive profitable growth at your store. Your larger competitors, on the other hand, are still analyzing these same initiatives and they require several managers to sign off before you’ll see anything at the store level. Advantage: you.
As a small operator, you're closer to the heartbeat of your No. 1 business-building component, your customers. The ultimate decision maker at your larger competitors is either the owner or CEO. The size of their organizational structure keeps them somewhat removed from the pulse of their customers. As a small operator, you see and interact with your customers every day -- at least you should. The owner/CEO of your larger competitors may only get out into the field to tour their stores once a month, or worse, quarterly. And even then, their focus is on store operations vs. spending time with customers to figure out what’s on their minds. Advantage: you.
As a small operator, you can quickly forge partnerships within your community with schools, the Chamber of Commerce, strategic alliances with auto-related businesses or servicing office building facilities (i.e. coffee promotions). You can then use these partnerships to promote your business and raise your presence, standing within the community as the go-to convenience store. Your larger competitors have to consider the political, legal and brand perception impacts before they can make a decision and take action. You can beat them to the punch and establish a foothold for your business within the community you serve. Advantage: you.
When you look at your larger, better-financed competitors, it’s easy to see on the surface how they may have the upper hand in terms of a competitive advantage over your single store. However, when you drill down beneath the surface, it may be you that has the real advantage.
But it’s only an advantage if you take action. So what are you waiting for?
Terry McKenna is principal and co-founder of Convenience Store Coaches & Employee Performance Strategies Inc., where he helps convenience retailers achieve greater financial results by optimizing their workforce. McKenna can be reached at (910) 458-5227 or [email protected] He also maintains a blog at www.terrymckenna.typepad.com.
Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News for the Single Store Owner.