Few companies have been fortunate enough to escape the impact of the global recession. But where some firms have encountered calamity, others have discovered opportunity. This is particularly true for small companies that once were hard-pressed to compete with larger rivals. Today, smallness can be a business advantage, says Marc Boroditsky, CEO of Passlogix.
The catastrophic failures of iconic corporations such as AIG, General Motors and Lehman Brothers have put anti-corporate sentiment at an all-time high. Grandiose pension payouts and investment fraud have further undermined the credibility of large organisations—whether justified or not. Big can no longer be equated with secure, and customers are now willing to consider alternatives to large suppliers previously given preference simply because of their size.
In fact, the crisis has brought home a universal truth: trust is the cornerstone of any successful relationship, including the relationship between a business and its customers. People don’t trust companies any more. They trust people.
And this is where smaller companies can have an edge over faceless corporate giants. They often have a more direct relationship with customers that is not yet obfuscated in layers of management, marketing segmentation and interactive voice systems. Larger companies naturally find it much harder to manage individual customer relationships since customers often find themselves dealing with different people each time they call. How can you expect a customer to trust you if they don’t know you?
Smaller firms have greater opportunities to get to know customers personally and develop stronger relationships as a result. This form of investment in customer relationship management pays dividends in a trust-deprived environment. It is the trump card that small businesses are best placed to play.
I run a technology company with just over 100 employees. If my customers have a problem, they know they can pick up the telephone to any member of the company, including me, and we will commit to helping them resolve their issue. It is much harder for larger companies to make this personal level of commitment. That’s one reason that we are prevailing over better-known enterprises like CA, Novell and IBM in head-to-head bids for business.
Nor is trust simply about the relationships you have with your customers. Developing trust needs to start from within: if your own employees don’t trust you, then your customers never will. Building mutual trust at all levels of an organisation from the receptionist to the board is essential. The larger a company is, the harder it is to effectively maintain that trust balance.
In a small company employees have much greater control over their future. If they do an excellent job, there is a good chance that their efforts will be recognised and rewarded, and this gives employees a sense of security. Conversely, in a company of thousands it’s easy to be missed. In an era of layoffs, that’s not a comforting thought.
Of course, trust is not exclusive to small businesses. But small businesses tend to share characteristics—such as customer orientation and direct control of products and services—that naturally foster trust. They also often have reliable owners, committed employees, personal client relationships and low overheads that contribute to a sense of trust and security both within the company and to outside customers.
There’s no doubt the recession is tough on everyone. But it is also providing fresh opportunities for smaller, nimbler companies that formerly didn’t even register on some customers’ radar. You have to prove yourself, but bigger is no longer automatically better. That, at least, is progress.