Today’s question comes from Matt:
“How can independent businesses compete with international conglomerates – or even just big national brands – competitively using Google AdWords?”
This doesn’t just apply to Google Ads. How does a small business compete with big business in general?
How does a small-town grocery store compete when a Walmart opens up on the outskirts of town?
Well, they can’t compete on price, right? They need to compete on what makes them unique. What makes a small-town grocery store special? What can you get there that you can’t get at Walmart?
Well, you can get a personal touch.
Examples may be:
- The cashier knows your name
- They bag your groceries
- They are helpful in the aisles
- They’re able to help you find things
- They take your groceries to the car
That’s really what it comes down to.
Usually, what the large business has going for them is a competitive price advantage.
They’re able to drive prices down. So forget about the price, because if a small business is trying to compete on price they’re going to lose every time they’re going to go out of business.
So what can you compete with as a small business? What are you better at than the national business? I’m sure you know this. Your customers need to know what you are better at than the large brand.
So when you’re applying that to your Google Ads, this should be the main selling point in your ads and on your landing page.
It’s not going to appeal to everyone. You can’t get every customer back from Walmart, just because you’re bagging people’s groceries.
Some people just want to go where the lowest prices are. They don’t care that:
- The aisles are clogged up with screaming kids all day
- They have to check out their own groceries using an automated checkout line
- They have to wait ten minutes to get through the line.
They’ll happily go through all that just to get lower prices at Walmart. You can’t worry about those people.
You need to focus on the people who are going to care about the thing that makes you different–the thing that differentiates you against the national brand.
So that should come across very clearly in your ads and on your landing page.
Now, Matt, who’s asking this question, looks like he either owns or works for a company that deals with real estate (selling real estate or renting out real estate for property owners). Let’s approach the question for that type of business specifically.
How does a local company dealing with real estate compete against a big national brand?
Well, obviously you’re going to know the local market much better.
As a property owner, if I’m looking for a company to help me rent out or manage my property, I am absolutely going to be more attracted to a local company than I am to a national brand. I want someone who knows the local market. I want someone in my city who knows the best way to advertise and rent out a property compared to a city in a different state, or a different country. In this type of market, a local business is going to be my preference, absolutely.
If I’m seeing a Google Ad, where someone makes it clear that they are local to me, that’s what I’m going to be drawn to.
Whatever type of business you’re in, that has to be the focus. If you’re worried about competing with national brands, you need to focus on what makes you unique. What is going to attract customers to you that they can’t get from a bigger brand.
What about for e-commerce?
Now, another issue that I do want to address is for businesses that are selling e-commerce type of stuff. There are big national brands that are really driving up the prices. And they’re really driving up the cost per click to the point where it does get very difficult for a smaller business to compete.
If you’re trying to sell some products online, and you do a Google search for your product, and the only ads you see are from Target and Macy’s and other big brands, chances are, they’re able to afford a much higher cost per click than you are. That’s unfortunate and a lot of the time, in that case, it’s actually is hard or impossible to compete because they’re not worried about making one sale. They’re spending millions of dollars per year on Google Ads, knowing that they don’t need to worry about just making the one sale. They’re trying to keep customers coming back again and again for life.
If you want to compete with big companies, you need a really strong back-end process where you are keeping these customers for life.
And maybe you’re able to lose money on the front end sale. Because eventually over time, you will make your money back on that. That’s how the big brands are doing it. That’s how they’re able to pay so much per click.
If you want to compete in a market like that, that’s just dominated by big brands, you need to get your lifetime customer value as high as possible. And you need to be aware that it is a long-term play-up. You are probably going to go in the hole initially. And you need to have the money to be able to do that. Maybe you don’t. So maybe Google Ads isn’t an option at this time.
What’s the bottom line?
Really, it’s about focusing on what makes you unique. If you’re in a situation where the cost per click is just so high because of the competition, then you really need to focus on increasing your lifetime customer value. And make sure if you’re not making your money back today on your ads, that you’re going to be making your money back down the road.