Marketing theory often highlights the inherent disadvantages faced by small brands. Firstly, customers’ brains naturally gravitate towards familiar names, equating well-known brands with trustworthiness. Secondly, advertising tends to be more cost effective for brands with wider availability, further reinforcing the dominance of larger players.
These and other factors create a seemingly insurmountable challenge for small brands but, more often than not, the perceived disadvantages of being a small brand are offset by unique advantages that can drive success in ways the big brands envy.
Living close to your customer
One of the biggest advantages for small and medium-sized enterprises [SMEs] is the ability to maintain a close relationship with their customers.
As a small brand, you can and should spend more time engaging with your customers, understanding their needs and preferences on a personal level. This intimacy allows for a deep, instinctual grasp of what your customers really care about, enabling you to tailor your product or service to better meet their needs.
You can do this far more readily than corporate management in a big office block, often in the role for no more than a year or so, and perhaps even working from another country. This personalised approach creates a strong sense of loyalty and trust, making customers feel that your brand is genuinely “for them”.
Agility and flexibility
Small brands also have the advantage of agility, unlike large corporations that often move slowly due to lengthy decision-making processes and the need for consensus and internal political manoeuvring. Small brands can pivot quickly, and this flexibility allows you to experiment, learn from mistakes, and make swift adjustments.
The ability to rapidly implement changes without the bureaucratic delays faced by larger firms is a powerful tool. When something doesn’t work, you can try again straight away, adapting your strategies until you find what resonates with your audience. This nimbleness is a key driver of innovation, progress and growth.
In large firms, decision-making is also often bogged down by layers of management and lengthy approval processes. These companies might spend months deliberating a single strategic move.
In contrast, small brands can take risks and make decisions on the fly, allowing for rapid experimentation and innovation. This ability to adapt quickly to market changes and the instant consumer feedback is an asset that many large brands struggle to match.
Selective targeting
Being small also allows you to be highly selective and focused in your marketing efforts. Instead of attempting to appeal to everyone, which is usually the strategy of large brands, you can concentrate on your ideal customer. This sniper-like approach to marketing enables you to allocate resources more efficiently and connect with your target audience in a more meaningful way.
Rather than spreading your marketing efforts thinly across a broad audience, you can identify and target specific demographics or communities that are most likely to respond positively to your brand. Being selective allows you to create highly personalised and impactful marketing messages that resonate deeply with your chosen audience.
Consider the story of Michael Kors, who hired a lorry and parked it outside the New York fashion fair to showcase his new range—a bold move that garnered significant attention and laid the foundation for his brand’s success. By being choosy and targeting your efforts where they matter most, you can achieve impactful results.
Bravery and creativity
Small brands can afford to be braver and more creative in their marketing strategies. Corporate middle management in large companies often operate under a cloud of risk aversion, where the fear of mistakes stifles innovation. The mantra is “spend loads to avoid risk”. In contrast, the natural positivity and optimism of a startup environment can be a powerful asset.
Embracing bold, creative approaches that larger competitors might shy away from allows you to stand out in a crowded market. For instance, small brands can leverage guerrilla marketing tactics, which are often too unconventional for risk-averse larger companies. These tactics can create buzz and draw attention without needing substantial financial investment.
Look at how ‘Liquid Death’ water has put multinationals on the back foot. Not only is the brand challenging and non-conformist as an idea, but its original play of starting in bars via beer company distributors was something the big players could never have done.
This willingness to take risks and think outside the box can result in unique and memorable campaigns that capture the public’s imagination and generate word-of-mouth publicity.
Leveraging niche markets
Another big advantage for small brands is the ability to cater to niche markets. While large brands aim for mass appeal, small ones can thrive by serving specific, underserved segments. This focus allows for a deeper connection with a particular group of customers who feel overlooked by the mainstream options.
By identifying and targeting niche markets, small brands can create products and services that are tailor-made to meet the unique needs and preferences of these specific groups. This specialised approach not only differentiates small brands from their larger competitors but also builds a loyal customer base that appreciates the personalised attention and dedication to their unique interests.
Building a meaningful brand
Small brands have the chance to build a strong, authentic brand identity from the ground up. Without the constraints of established brand guidelines or corporate red tape, you can craft a brand story that resonates deeply with your audience, which can be a huge draw for customers seeking genuine, relatable brands.
Creating a compelling brand narrative that reflects your values, mission, and personality can set you apart in a crowded marketplace. Customers today are increasingly drawn to brands that stand for something and align with their own values. By building a brand identity that is both unique and authentic, small brands can cultivate a loyal customer base that feels a personal connection to the brand. Founders are central to this process – look at how Ben & Jerry’s built their business.
Final thoughts
While small brands might face some challenges, and we don’t want to downplay how hard it is to break into a market, they have some serious strengths that can lead to huge success. By doubling down on these, an entrepreneur optimises their chances.
Being small can, in fact, be an advantage. With agility, close customer relationships, and the freedom to innovate, these companies can make a real impact, go head-to-head with the big players and maybe even come out on top.
Size doesn’t have to be a setback – it can be the secret to success.
Author: Roger Jackson, founder and CEO of SenseCheck