Feb 8, 2008

How can SMBs compete with big players

Four of us from Tvarita Consulting attended a NASSCOM SME sector conference in Hyderabad in December 2007. Some entrepreneurs shared what is essential to make a small player succeed in a market and compete with large firms.

One insight was that customer needs can be classified as follows:

  1. Irritant
  2. Headache
  3. Migrane

Only enterprises with high discretionary spend will bother with irritants. And these spends will invariably go to the big players. The headache will also be resolved by bigger players.

It's in the migrane areas that small businesses can get a foot through the door. By making a name which causes clients/customers to look beyond the bigger players. Smaller players can guarantee senior talent involvement and a hunger to perform - both which a large player can ignore due to the size.

Related points raised by speakers was that small businesses should explore and find that niche, as one of them said "the reason to exist".

Another speaker said while promotion could be built on educating a client that a migrane is waiting to happen, but to avoid making "missionary sales". An SMB is only one service provider amongst many and its services/products have to fit into the clients' larger ecosystem.