When the shadow of competition from big box stores and online retailers falls across your smaller, local retail business, it’s easy to feel intimidated. That’s when it’s time to turn up the lights on your competitive advantages.
Your competitive advantages live in two places: (1) Where your business interacts in personalized ways with your customers, and (2) Where your business attracts and retains top-quality, A-player employees. The four strategies that follow will empower you to leverage your strengths in both of those areas to generate sustainable business growth.
Strategy #1: Optimize the Customer’s Experience
Personalization
One of your greatest advantages is your ability to provide a personalized shopping experience. Train your employees to welcome, recognize, and remember regular customers, paying attention to their preferences as well as their interests and concerns. People who feel heard and understood express a higher rate of customer satisfaction. And satisfied customers are more likely to refer their friends to you as well.
Deepen your team’s concept of “customer experience” to mean “building relationships.” My own family’s car dealership business faced competition from larger public companies operating in our geographical market. Though they had far greater buying power, we offered better and more personalized service to our customers, building on the strong relationships we already had in the market. For that reason, we served some of our customers’ families for generations…from their first car to their grandchild’s first car. Customer relationships built loyalty, keeping our business thriving and growing.
Go narrow and deep with your offerings. Use your purchasing flexibility to source some of your items from suppliers that appeal to your local demographic. Alongside your must-have standard items, carry niche items that suit your particular community and your most typical shoppers. (And don’t forget those un-reached new customers you hope to attract.) Aim to become the exclusive local provider of unique, high-demand products.
Rapid Response
Along the same lines, solicit and respond quickly to feedback from customers. My family business held regular customer focus groups to get timely and honest feedback on the service we were providing and to get ideas for how to serve our customers better. As my mentor used to say, “customer perception is reality.” In other words, it doesn’t matter if you think you are doing a good job or not; it matters what your customers think.
Similarly, provide quick and satisfying answers to customer’s complaints or concerns. I’ve always viewed customer complaints as an opportunity to respond in a way that strengthens the relationship. I once gave a customer a full refund for a new sports car purchase because he didn’t like the quality of the paint job—even though the manufacturer’s inspection revealed that it was factory standard and perfectly acceptable. Although we made a loss on this vehicle, that customer purchased many more cars from us over the years and also referred his friends and family.
Sometimes you have to remind yourself of the whole lifetime value of a customer. Be prepared to take a short-term loss, such as honoring a coupon that may technically have expired when you have the customer standing there in your store wanting to purchase something – which is why you sent the coupon out originally!
Surpassed Expectations
Providing over-the-top value to your customers is one of the best growth strategies on the planet. Identify the points at which your business can offer something more than the average customer experience. Consider:
- Offering loyalty programs with truly desirable incentives (discounts on their favorite brands, exclusive offers tailored to their preferences…)
- Assisting with or providing delivery
- Carrying large items to vehicles
- Locating hard-to-find items
- Cutting materials to size
- Demonstrating products
- Providing take-home samples
- Explaining technical terms in simpler language
- Making signage accessible to movement- or vision-impaired customers
- Maintaining an uncluttered, clean environment—indoors and out
- Offering curbside pick-up (for phone or online orders)
- Incentivizing referrals with a win-win offer for the original and new customer
Smaller retail businesses can capitalize on their competitive advantage in the area of offering superb in-store customer experiences. That’s what keeps current customers coming back.
However, attracting new customers is crucial to business growth as well. The next strategy helps small retailers leverage being part of a community to do just that.
Strategy #2: Highlight Community Involvement
Your status as a local business gives you powerful connections in your community that no big box store can mimic. Show your community how much you care about them and the things they care about. Be a good neighbor.
Befriend Other Businesses
Join your Chamber of Commerce and build relationships with other business owners. Find new ways to help each other.
Spotlight Your Hometown Contributions
Promote all the ways local businesses like yours strengthen your community. Utilize in-store posters, run ads in the local paper, set out parking lot signs you can swap out periodically, and post pro-community images with captions on social media. Make them all about your contributions to your hometown:
- Hiring local and paying fair wages
- Keeping their dollars in their downtown
- Stocking products in the quality and quantity (small sets vs. bulk packaging) your neighbors typically need
- Frequenting local businesses, supporting local schools, participating in local churches and/or service organizations, donating to police or fire departments
Engage with Community Activities
What’s big in your community? Consider sponsoring a Little League team or donating signage, water bottles, or snacks for a community festival (in exchange for a little business promotion, of course). Support community initiatives that align with your company’s values while showcasing your desire to improve life for the people you serve. Assist with local nonprofit fundraising, maybe even letting them set up a display in your store if appropriate. Build employee teamwork by adopting a highway you will keep litter-free; your business name on the roadway sign builds more community awareness.
A little bit of genuine “loving your neighbor” can build a great deal of goodwill. And community goodwill helps build a loyal customer base.
Looking good out in the community is only part of the story, of course. The next business growth strategy is all about building the kind of team that makes the community enjoy coming to your store.
Strategy #3: Hire A-Player Employees by Recruiting Customer-Centric Teammates
Fielding a team of customer-focused employees is critical for growing your business. But A-Players like these are rare finds. So they are worth your best recruiting efforts. (See this post [ link: https://richardjbryan.com/blog/2024/09/09/how-your-a-players-empower-strong-succession-planning/ ] for more on what A-Players look like.)
A strong customer-centric team results from a robust combination of smart hiring practices and purposeful training.
To strengthen your current hiring process, build in actions like these:
- Make your expected customer experience part of the job description. Start with a scorecard that clearly defines what your mission and vision is and outlines what A- Player performance looks like in the role. This should include your core purpose as a company (why you are in business) and your core values (how you do business) as a way of attracting the right people and differentiating yourself from your larger competitors.
- Sell applicants on why your store is a great place to work. Describe your company culture, how your management style builds up employees, and the kind of customer-friendly environment you have built over the years.
- Ask about a past customer service faux pas they committed and how they would handle it today. Great employees remember the lessons they’ve learned; poor ones won’t have a story to tell.
- Explore candidates’ soft skills using deeper questions. For instance, have them tell you about why they want a job working with customers, how they learned to listen well, whom they admire and why. Discuss their participation in activities involving other people. Assess how clearly they communicate.
- Observe them interacting with employees. Give candidates an opportunity to shadow a worker with a similar role. Note how curious, engaged, and interested they are.
- Recruit loyal customers. People who know and love your store will want to help others know and love your store. Incorporate interview questions about how they would replicate the positive customer experiences they have had with you.
- Hire employees who continuously improve. Ask them about ways they have taken initiative to improve their own performance. Have they ever simplified a process to deliver better service? How have they made a customer’s experience easier?
- Incentivize referrals from your existing A-Players. Here’s a method that worked in our dealerships when in dire need of technicians: Team members who referred a new hire received $1,500 when the job offer was accepted and another $1,500 if they successfully made it through the 3-month probationary period. You may not get a lot of people this way but the ones you will get will be A-Players.
Once you hire those customer-centric employees, keep building them up through ongoing development and support. This leads us to the last business growth strategy, retention.
Strategy #4: Retain A-Player Employees
Your customer-centric A-Player employees need to know they are valued. If you don’t already, start offering employee discounts or other programs that increase their sense of importance to your business. Valued employees will become your biggest advocates, alongside their family and friends.
Undervalued employees will find somewhere else to work. Their loss will trickle down to your customers in lower-quality service, reduced expertise in store, and a less enjoyable customer experience. So ramp up your retention practices with some of these strategies.
Make career development part of the package.
Map out clear internal career paths, encouraging improvement in employees’ current roles while opening doors to growth into new ones.
Create a strong onboarding process that equips new hires with an understanding of the fundamental skills needed to perform well. Then follow up with regular assessments, giving workers a chance to self-evaluate and to hear your evaluation of their present performance. Provide training to keep them up-to-date and to help them shore up weak areas.
Hold daily stand-up meetings. My coaching clients do a 10- to 15-minute huddle at the beginning of each day as well then a 45- to 60-minute weekly meeting on a Monday morning to set the tone for the week. This keeps communication flowing and eliminates the need for lots of other time-consuming meetings.
Be and build strong leaders. Model the kind of positive, inspirational, and informed leadership you want to see among your team. For those who show leadership potential, equip them with training in management. Intentionally point out to them your efforts at active listening, careful decision-making, gaining consensus, and leveraging the motivational power of honest praise. Demonstrate ways to stay on top of the ever-changing business landscape to keep the business growing.
Think succession planning. Keep a long-term view in mind as you develop your employees to fill your leadership roles of the future. For more on succession planning, see this blog post. [link: https://richardjbryan.com/blog/2024/03/11/succession-planning-how-to-set-your-business-up-for-long-term-success/ ]
Keep the Work Rewarding and Meaningful
Retail is notoriously undervalued by job-seekers. Turn that mindset on its head by ensuring your team members feel their work matters. Here are some suggestions to make that happen.
Recognize outstanding work. Set attainable and important levels of achievement and reward those who reach them, using rewards that matter to your employees. Do they want a donation made to a cause they value? Does a bonus make a difference? Does rewarding team performance inspire everyone?
Streamline their processes. Invest in technology that delegates busy work to the computer and keeps your A-Players out doing what they do best: providing excellent customer experiences and implementing steps to grow your business. Encourage working smarter not just more.
Maintain the company’s core values. Don’t let standards slide or your best employees will become demoralized.
Promote a two-way feedback culture. Emphasize that business growth depends on both you and your employees. In addition to your regular employee assessment meetings, provide several means for suggesting improvements. Respond thoughtfully to complaints and concerns. Welcome innovative ideas. Feedback is the breakfast of champions.
These four business growth strategies are uniquely effective for smaller retail businesses like yours. So when the shadow of your competition looms large, turn a spotlight on your strengths and you will outshine those other competitors.
To get personalized insights on applying these strategies to your own business, set up a one-to-one call with me here: https://calendly.com/richardjbryan/discovery-session. We can discuss these strategies in more detail and identify which ones are a good fit to help your business grow.
