At the risk of sounding anti-American, please allow me to react to the concept of Small Business Saturday: bah, humbug! Don’t get me wrong. I’m not against small business. I’m not against picking up a few extra bucks in sales or potentially a new customer. I’m against the concept that we small business owners have to be given special protection in order to survive, like the snail darter.
“Pick a small business in your community to shop at on Small Business Saturday,” the ad on television says. Joe Scarborough and Mika Brzezinski do a stand-up patronization spot in which they implore good Americans to patronize small businesses.
Hey, it’s about competition. And if a small business can’t compete alongside Wal-Mart, Target, or Amazon, then we can’t make it up by having a special Saturday.
OK, I’m not saying do away with Small Business Saturday. It’s a fantastic promotion. Well, it’s a fantastic promotion for American Express anyway, whose penetration among small business merchants was miniscule compared to BankAmerica (Visa—I’m old), MasterCard, and even Discover. And that’s why we have a Small Business Saturday. American Express launched it as a way to penetrate the small business community’s marketplace for credit cards. You do know that it costs a merchant twice as much to process an American Express charge as it does the other bank cards don’t you? And you know the merchant doesn’t get the money as fast? Well, that’s the scoop.
So, it’s a brilliant ploy on behalf of American Express. And, yes, it highlights and benefits some small businesses, but American Express has a lot of skin in the game as well.
It reminds me of the National Federation of Independent Business (NFIB) which has FedEx Office as a premiere partner. FedEx Office competes with tons of printers and copy shops, but NFIB heavily promotes it in exchange, I assume, for sponsorship support (read: cash).
The way you beat Tiger Woods is to play him in a game other than golf. The way you beat Wal-Mart is not go head-to-head with them. Instead, create a compelling offer based on something they cannot provide, or go out of business.
That usually means a bigger selection of whatever you sell coupled with unique personal service. A retail store selling a broad line of exotic and locally produced candles with unique scents would be an example. A business that not only sells window fashions (curtains, for instance) but comes to your home and advises you on the selection based on the ambience you wish to achieve is another example.
In any competition, one must look at the opponent’s strengths and weaknesses. Exploit their weakness by being something that they are not. Do not try to outmuscle them at their own game.
A successful toy store I know remained in business by offering unique children’s toys (like playground-type equipment) which were safer than those the typical retailer offered, plus they came to your home and set it up. Yes, it cost more, not less. They also assembled everything they sold so the parents didn’t have to do it the night before Christmas.
Hey, when we have a unique selling proposition in whatever we do, we can compete every day of every week with everyone else, whether other small businesses or big box retailers. And that way we don’t have to beg customers to take pity on us and buy just to keep the American dream alive. Fact is, if we have a unique proposition with an aggressive and intelligent management, you never know: we might just grow up to be the next big business. Stranger things have happened. Ask Fred Jones of FedEx or Ray Kroc of McDonald’s (if he were still alive). Or ask Henry Wells, William G. Fargo, or John Warren Butterfield. They founded American Express. Of course, they’re dead as well, since the company was founded in 1850. And, yeah, they’re the same folks who founded Wells Fargo & Company.