by Charles Barr, Co-founder of LVRG
I was at a dinner gathering a few weeks ago, and some of the guests were talking about trips they'd recently taken. One of the attendees told a story about a weekend getaway, where his wife and kids visited an ice cream shop in Chicago. This particular ice cream shop was recommended by another family, so they were eager to go. One night after an incredible dinner, they decided it was time for dessert. So, off they went to this memorable place. After waiting in line and being sat, the owner of this remarkable small business walked up to their table to greet them, telling them all about his signature dessert. It was 75 scoops of ice cream with every topping imaginable, all piled into a massive bowl and placed in the middle of your table. It was massive, heavenly, and came with a price tag of $100.
Some of you may be saying to yourself, there's no way I’d pay $100 for ice cream. What patrons are willing to pay for at this particular small local business (and lined up out the door, I might add) is the experience, and the story they get to tell about it afterward. The kids couldn’t be happier, taking photos and posting them all over social media, while the parents sit in amazement. Let’s face it, I’ve never heard someone get excited and command the room of 30 guests talking about a $2.00 chocolate chip cone at the local drive through. Have you? The reality is, the parents couldn’t care less how much this dessert cost, because the look on their kids face while devouring this monstrosity is priceless. The owner of the shop is shrewd; he's identified what makes his small business special, and that's what he's selling. Yes, it’s the 75 scoops of ice cream, more sprinkles and hot fudge than you could possibly swallow, but this place creates an everlasting memory, and people will gladly pay for that experience.
It’s not a level playing field for SMBs
Let’s face it, independent small businesses are operating at a significant disadvantage in our current economy. They have to pay a lease on their buildings, usually exorbitant insurance costs, utilities, labor expenses, inventory expenses, and a host of other bills just to keep the lights on and the doors open. In that sense, they have almost no chance of competing with huge companies that can leverage their capital, technological advantages, and economies of scale to undercut smaller, Main Street-style businesses – “Mom and Pops” – at every turn.
Think of it this way: Suppose you're a small business that sells shoes. How can you convince a customer to buy shoes from you instead of from Amazon.com? Thanks to your overhead, you can't sell your shoes as cheaply as Amazon can. You can't afford to maintain the inventory or warehouses that Amazon can, so you might not have the right shoes in the right sizes in stock at all times. You can't afford to be open 24 hours a day, so you can't sell your shoes at 3 a.m. the way Amazon can, and the customer can't buy shoes from you on his couch lounging around freely in his underwear.
That sounds hopeless, doesn't it? Well, it shouldn't, because you've got something that Amazon doesn't have. You have the opportunity to sell an experience. You have the opportunity to create a memory. You have the power to give your customers personal, hands-on attention. You can find out about their individual needs, and you can help them find exactly the shoes that will work best for them. You can give them a shoe-buying experience that will have them walking out the door smiling, and they'll be very likely to come back the next time they need a pair of shoes.
Relationships are everything
The secret to succeeding as an independent business owner is providing value to your customers that they can't find elsewhere. As a small business owner on Main Street, the greatest value you have to offer is the human touch. You can do business the way that it's been done for centuries, with small business owners and their staffs developing relationships with the people of the communities they serve. Customers value those relationships, and they're willing to patronize the independent businesses that provide them.
No one is going to sit around the dinner table telling stories about buying shoes from Amazon. The process is efficient and relatively cheap, but it doesn't inspire interest, joy, passion, or loyalty. People will, however, tell stories about the ice cream shop that brings a mountain of ice cream to your table if you want it, and the people who hear the story just might decide to visit the shop. As a small business owner, you have the ability to offer your creativity, your heart, and your personal dedication to your customers. If you do that, you'll delight the people you do business with, and there will be no stopping you.
For more information on LVRG Funding visit their website at www.lvrgllc.com.