While growing my business from bootstrapped startup to a respected player in the auto insurance technology industry, the biblical tale serves in a way – a strategic and tactical guide to capturing market share from the “big boys.”
Bringing a Rock to a Swordfight
An analysis of the David and Goliath story reveals a sound strategy, and several key tactics, that a small business can use against larger, well-funded rivals.
The strategy is a form of “asymmetrical warfare” that’s based on recognizing that size is not necessarily strength. In fact, “bigness” can sometimes be a significant handicap.
Though Goliath was a powerful man armed with formidable resources – a sword and spear to David’s slingshot – David turned these strengths into liabilities. Seeing that Goliath was a lumbering, conventionally trained behemoth, David deployed creativity, speed and agility to negate Goliath’s advantages.
Instead of foolishly engaging in hand-to-hand combat with the physically stronger man, David brought a rock to the swordfight – a tactic to which Goliath could not respond quickly enough.
If you’re a small company, I recommend that you adopt this form of “business jiu-jitsu.” By leveraging the alleged strengths of large competitors, you can chip away at their customer bases before these slow-moving Goliaths can effectively respond.
Here are three tactics that have worked well for my own firm.
1. Focus on Customizing Products and Exceptional Service. Like many small companies starting out with a virtual office and virtual team, our marketing tried to convey the impression that we were larger than we actually were – that we were worthy adversaries of the big boys.
What we soon discovered, though, was: (A) our target market didn’t care about size; (B) many clients were dissatisfied with the lack of personal attention provided by the big competitors; and (C) we couldn’t initially compete with larger firms in the “core competency arena.” Where we could compete was in developing highly customized products and services to meet the needs of small and mid-size insurers.
One strength of being bigger is the ability to offer a large array of products and services. One weakness is that big companies rarely lavish much attention or money on any single offering. If you provide a niche product and excel at customization and customer service, you can carve out market share in that sector and then take control of it, ultimately expanding into other market segments.
As clients started to recognize the value of our technology platform, we were able to compete with the bigger companies because customers came to trust our brand. They felt more confident hiring us, thanks to our success in delivering customized products instead of one-size-fits-all solutions.
2. Move Faster. At many large companies, labyrinthine bureaucracies, processes and practices slow product development. Good ideas often die in this committee or that subcommittee. In other words, the largest firms have all the speed and maneuverability of an oil tanker. By contrast, your small size allows you to race ahead like a speedboat, and turn on a dime.
A key factor in our growth is that the major players in our industry allowed their technology to stagnate. We didn’t have to spend months in strategy sessions and development meetings. We met with clients, listened to their needs, and implemented new technology solutions and customer service programs while our rivals were still standing at the drawing board.
As we pioneered solutions in the mobile sector, and integrated vast networks of value chain partners into a single technology platform, the bigger companies have struggled to keep up. This is where speed and agility is of the essence.
3. Leverage Low-Cost Marketing. With billion dollar competitors, we don’t try to match their big-budget marketing methods. We excel at low-cost social media promotions comprising of blogs, white papers, and “micro-content” that includes short videos.
These efforts build brand awareness faster than we originally thought possible, all because we maximized LinkedIn, Facebook, YouTube, Instagram and Twitter in ways the larger companies haven’t.
For example: as we grew, some competitors tried to pigeonhole us as “merely” a provider of claims services (our original entry point into the marketplace). They also minimize and downplay our technology, which has been gaining a lot of traction.
In response, we created a lighthearted social media marketing campaign that turned their criticisms into our strengths. Using video we busted the myths of what the competitors say while simultaneously showcasing our technology. Based on the feedback we received at trade shows, conferences and client meetings, the campaign was a big hit. It was a classic example of business jiu-jitsu, turning our competitors’ mighty marketing muscles against them.
To be an Exception, Take an Exceptional Approach
In the business world, being big normally confers a big advantage. David and Goliath stories, however well-publicized, are the exception – not the rule.
For this reason, an entrepreneur who wishes to be the exception should take an exceptional approach. Just as a small guerilla band doesn’t engage in set-piece battles with giant armies, small businesses should avoid direct competition with larger rivals. They should focus instead on capturing niche markets that the big boys tend to ignore. Once enough low-hanging fruit has been gathered, then – and only then – should you consider a sword fight with your industry’s Goliaths.
However, as with any competitive industry you can never revel in past triumphs and accomplishments. The fight is never ending and the battle must be waged continuously to ensure future victories. Your business depends upon it.
Originally published in HuffPost