Target Small Businesses To Boost Conversions And Profitability

How & Why Large-Scale Companies Target Small Businesses?

Large-scale companies use several strategies to scale up their business operations and augment their market share. However, one of the most effective strategies is targeting small businesses to reach every household.

You see, small businesses enjoy excellent market penetration, community support, and exceptional consumer loyalty. They understand the mindset of the consumers and can successfully forecast their buying behaviour.

Therefore, these small businesses can play a vital role in the growth and profitability of big players if approached correctly. The market experts also second the thought that the majority of the companies might not be able to thrive in the competition without small businesses.

Small businesses act as a missing link to create brand awareness and brand loyalty among consumers residing in smaller towns. So, how do major companies target small businesses to expand their operations, reach more consumers, and book higher profits? Keep reading on to know more about it.

Let us understand why small businesses should be an integral part of marketing strategies and how companies should go about it. We will conclude the blog with some FAQs for a better understanding.

Advantages of Collaborating with Small Businesses

Larger companies that decide to join hands with smaller businesses are always in a win-win situation. How? The companies will get an opportunity to tap the untouched market. In contrast, small businesses will get a chance to flourish under the guidance of a larger market player.

Higher Demand in Rural Areas

India is among the fastest developing countries in the world. Along with education and infrastructure, one more thing that is increasing rapidly is the standard of living. People residing in rural areas or smaller towns are swiftly improving their life choices.

They have high liquidity and does not mind spending money on high-end products. Small businesses alone might not be able to match up to this surging demand. Several FMCG, Clothing, and IT companies can grab this golden opportunity by joining hands with small-town businesses.

It will not only create a satisfied consumer base for them but will also boost the brand presence. Furthermore, business expansion, high profitability, and better market penetration are other benefits of targeting small businesses.

Changing Consumer Preferences

Consumers in rural and under-developed areas are switching from unbranded to branded products. Be it soaps, shampoos, batteries, detergents, or apparels, they prefer to pick branded products over unbranded ones.

Small businesses might not have the funds and access to these high-end brands. The larger companies that are planning to capture the rural market can take advantage of this opportunity.

They can team-up with the small businesses and supply products under their brand. You see, it will be a favourable situation for both parties. The companies will get access to the core market, whereas small businesses can develop their business operations.

However, it will be crucial for companies to come up with affordable and attractive offers to build trust among consumers.

Access to a wider network

The best part about joining hands with smaller businesses is giving it instant access to a wider network. You see, the majority of the rural market is captured by local vendors, wholesale distributors, and small businesses.

Companies can take advantage of this bond to expand their business operations. The majority of the local businesses are operating in the rural markets for generations. They have the sales expertise and excellent understanding of consumer behaviour.

Moreover, they are also pro in moulding the demands and needs of rural consumers. And any access to this market can take the brand presence and loyalty to another level.

Ready Workforce

Small business people generally have a team of salespersons responsible for selling products in a particular town or city. Companies that want to expand their operations will get a ready workforce that understands the town’s selling patterns.

They need to hire area sales managers or sales managers to supervise the selling team. These professionals will be responsible for updating the sales team about the upcoming offers and marketing strategies. That’s it.

Business Plan

Larger companies planning to target small businesses in rural areas need not worry about the marketing plan part. Do you know why? Because smaller firms who are operating in these areas for years might already have a fool-proof business plan.

They understand the in and out of their market. They also know how to effectively manage the supply and demand curve to maintain their sales and boost profits. Companies just need to refine this plan for better outcomes.

Aligning the organisational objectives with an already existing business plan will prove to be a smart move here. However, marketers must also study personnel needs, revenue projections, and production costs before finalising the new business plan.

Better Marketing

Companies can take optimum advantage of their marketing efforts by teaming up with small businesses. It is an excellent way to reach the farthest audience in a single shot. Moreover, effective marketing strategies will also help in generating new customers and satisfying the existing ones.

Setting-up a 24*7 consumer support system will also help solve the issues and queries of the consumers. Companies can use several promising means to market their products and services. The right efforts done at the right time can contribute immensely to the success of the company.

Cost-Effective

Researching and experimenting on a completely new zone can prove costly and risky for the companies. On the other hand, moving ahead with an already established business will prove to be a masterstroke for the companies. It will help in capturing a bigger market with lesser efforts.

How Should Companies Go About It?

Here are some simple tips that can help companies in engaging with the right businesses.

Study the Area – Ideally, the companies should start by studying the prospective areas or cities that can help to increase their sales. They should target the areas that have a mature and educated consumer base. Going for extremely under-developed areas might not yield desired results. Therefore, it is crucial to identify the most promising areas before moving on to the marketing process.
Connect with the Local Experts – Connecting with the local market experts to gain more data about the area will prove to be a wise idea. It will assist the marketers in understanding the demography, buying behaviour, and expectations of the consumers.
Identify the Top Businesses – The third step is to pick the top businesses running in the town. Companies should go for businesses that are present in the town for a longer time. In other words, they should collaborate with the businesses that have earned the locals’ trust and confidence. Aligning marketing goals with such businesses will move the needle and ensure better outputs.
Present Business Plan – You see, a well-presented business plan will always get a positive response from small businesses. The marketers should deep-dive to design an attractive business plan to present in front of the local companies. It should talk about the mission and vision of the company eventually. Moreover, it should highlight how these businesses will grow after joining hands with bigger companies. Above all, the business plan should have a perfect mix of profitability, feasibility, and growth.

Bottom Line

FMCG, automobile, healthcare, and construction are the top four industries that specifically target small businesses to grow their business operations. Targeting small businesses helps gain consumer loyalty, build strong brand visibility, and explore the hidden business potential. Therefore, companies planning to magnify their consumer reach in 2021 should consider creating a corporate synergy with small businesses.

Also Read:

1) What Are the Small Business Ideas for Big Cities?
2) What Kind of Small Business Can I Do in A Rural Area?
3) What Business Can I Start in a Small Town in India?
4) What Is Most Important to Small Business Owners?

FAQs

Q. Why should small businesses consider collaboration with bigger players in the market?

Ans. The collaboration will:

Save time, money, and efforts.
Help in expanding network
Opportunity for learning

Q. Which companies specifically target small businesses to expand their consumer base?

Ans. Companies dealing with FMCG, automobile, healthcare, and construction generally target small businesses.

Q. Why targeting small businesses is a win-win situation?

Ans. Small businesses will get a boost in terms of profitability. In contrast, larger companies will get access to remote markets.

Q. How can a company expand its customer base?

By rolling out attractive offers to its customers
Using social media to reach out to maximum prospects
Sending promotional emails and newsletters