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Large businesses seem to have all of the advantages—economies of scale, pricing power, and brand recognition, to name a few. Yet, small businesses across the United States are beating their larger competition through one simple idea: creating better customer experiences. 

While many large businesses provide great customer experiences, consolidation in industries from banking to mobile phone carriers has created less competition and in many cases worsening customer experiences. Sure, large businesses like Zappos and Starbucks excel at customer experience, but overall, customers are facing increasingly larger organizations and increasingly less personal service.

Using the five ideas below, you can differentiate your business from the mass of faceless, impersonal giants that customers confront every day, and you can turn customer experience into the ultimate competitive advantage.

1. Know Your Customers Better Than Your Competitors

Even in industries like banking that have large, dominant players, small businesses succeed against the odds every day. They do so, first and foremost, by knowing who their customers are and what they want. As a small business, you have the ability to forge deeper relationships with your customers and to learn what truly matters to them.

Technology is your friend. Never before has small business had better access to tools to manage and understand its customers. Customer relationship management (CRM) systems, ranging from basic solutions like Highrise to more robust solutions like Salesforce.com, can be had for a few hundred dollars a month and will often give you as much power and functionality as the multi-million dollar systems used by large companies.

2. Make Customer Experiences Truly Personal

Once you’ve begun getting to know your customers, you should use that data to create richer, more personalized experiences. Personalization is about more than sending a birthday coupon or using the customer’s name in an email blast; effective personalization takes into account customer preferences and uses that information to create a customized experience.

Personalization does not have to be elaborate. “Will you be waiting or do you need a loaner?” is a typical phrase one hears from the service department at an auto dealership. With just a small tweak, that phrase could become this one: “I know you generally prefer a loaner Mr. Smith; would you like me to reserve one for your appointment on Tuesday?” Small, simple personalizations like this one make customers feel like valued guests instead of like another number.

3. Rapid Response Is Your Secret Weapon

If customer service had a Zen master, he would ask, “When a complaint falls in a Fortune 100 company, is anyone there to hear it?” Shortening the feedback loop, the amount of time from feedback to response, is one of the easiest ways to differentiate your customer experience from larger organizations—and from many small ones as well.

How fast your organization responds to customer feedback and how well you “close the loop” (make sure both the issue and the cause of the issue are resolved) can go a long way towards creating a customer experience that is often not replicated by larger organizations.

4. Bend at the Places Big Business Breaks

In larger companies, local stores and frontline teams are often boxed in by policies and procedures created by legal and operations departments hundreds of miles away. These rules are not always ill-advised, but they are often driven by factors other than enhancing the customer experience. In many cases, local teams do not have the flexibility to know when a rule can be put aside for the benefit of the customer; you do.

Make sure you know which processes and policies are iron-clad and which can be bent or adapted. Use the nimbleness of your small size to your advantage. When you can, make exceptions, circumvent processes, and override policies to make each customer experience as exceptional as possible.

5. Empower Your Teams to Power Your Experiences

Once you embrace flexibility, do so as an organization. Make sure you empower your teams to be flexible, not just supervisors and managers. While most large companies keep a firm grip on their teams, customer service legend Ritz Carlton shows the effectiveness of empowerment by granting any employee up to $2,000 to solve a customer issue without needing management approval. The dollar amount is unimportant; it is the principle that is useful.

Use smart empowerment to empower your employees to solve as many problems in real-time as possible. It’s not just about having a budget; it’s also about circumventing processes and making sure that your frontline teams do not have to fill out three TPS reports to solve a simple service issue. Empower your teams so that five-dollar problems don’t escalate into five hundred dollar problems.

Using the five ideas above, any small business can use customer experience to establish advantage over larger competitors. Speed and flexibility are your assets; use them to make every customer experience a great one!

About the Author(s)

Adam Toporek

Adam Toporek is the author of Be Your Customer's Hero: Real-World Tips & Techniques for the Service Front Lines (2015), as well as the founder of the popular Customers That Stick® blog and co-host of the Crack the Customer Code podcast.

Customer Experience