Large companies can seem like they have the entire market stitched up, but as this business owner explains, it is possible to differentiate yourself and become a viable alternative.
Speaking on the My Business Podcast, Reuben Carranza, head of US-based hair care manufacturer and distributor Luxury Brand Partners, says that rather than competing against the budgets of large competitors, SMEs should play to their strengths with other small business customers.
“We work predominantly with small business owners, and those small business owners are service-related business owners, which I think is the hardest small business to do. For them, the quality of the service they provide to the clientele is what keeps people coming back, but a key piece of that is the products that they're using,” Reuben explains.
“I think what has made us a bit different is … what has tended to happen in the beauty business is most of the breakthrough innovation that's happening on the product side is coming from smaller companies.
“The big companies are leveraging scale, but the real innovation is happening with smaller companies. The challenge for the small business salon owner is how do you decide which of those small businesses or those small brands are actually bringing innovation that you can rely on and then support with your clientele?”
According to Reuben, you can make inroads by understanding that large corporates rely on scale and brand awareness to sell products, and start-ups solely use their innovation, enabling businesses in the middle to leverage both simultaneously as a point of difference.
By doing so, such businesses can demonstrate innovations they are making within their sector among their existing loyal customer base and network of suppliers, and in turn use that to add further scale – as opposed to marketing directly to prospective new customers.
“I think what we bring that's a bit different is … we are a small company and we are bringing innovation, but we're bringing it based off a footprint and off a team that has done the homework, that understands how to scale it up,” says Reuben.
“We're creating the consumer awareness, the consumer excitement about it. At the same time, we're trying to get the stylist, the hairdresser to understand the product as well.
“We've found there's very few that are able to do it in that way. There are a lot of people who are creating innovation, but they're trying to play in multiple channels and that has a different dynamic to it as well.”