"We're all familiar with Pieratt's, a locally owned appliance and audio/video retailer with two locations in town. You probably don't know that it began as a radio repair service after Frank Pieratt returned from World War II and put his wartime skill to use as a civilian. As time went on, he began to sell radios, and when television made its grand entry, he sold TV sets as well. Today, Pieratt's not only sells the newest video equipment but a wide variety of other household hard goods, including bedding and major kitchen appliances. Not only do they have a strong consumer franchise, but they are well entrenched in the contractor business as well.
Over the years, we have seen locally owned retailers suffer and disappear as major chains enter the market. Usually, the chains have the ability to sell the same products for a cheaper price due to their buying clout with the manufacturers. While not a universal truth, it has led to the general consumer perception that local means higher prices and national means lower prices. A thriving Pieratt's, then, would seem out of place in today's retail environment.
The answer, though, lies in a marketing program put in place in 1998 that continues today. On Sunday, when the major chain retailers have their glossy newspaper inserts, Michael Cox, Pieratt's director of advertising and marketing, pores over their offerings. He identifies specific products also carried by Pieratt's where their price is lower or finds ones where they can make them lower. In most cases, though, they already are lower than the price advertised by the majors, so no adjustment is necessary. Having ensured that they have sufficient stock on hand, details are set, and by Tuesday morning, TV spots are ready to air. Each spot features two different products within the 30-second ad, thereby increasing product coverage and potential consumer interest. Interestingly, they have never had a week in which they couldn't identify products and areas where they could beat the competition.
Does that mean that there is a run on those specific products by the middle of the week? Not necessarily. Often, sales volume for the featured products increases very little. But that's just fine with them. They point out that the entire purpose of the campaign is to embed in the consumers' minds that Pieratt's can deliver on low prices and beat the major chains on a regular basis. If they can successfully do that, then they will be on the consumers' mental shopping list when they do have need of a specific product or appliance.
Another strength that they have over the major chains is their level of service. They employ their own in-house technicians to solve any problem a buyer might have with a product, and they do their own deliveries. The major chains generally rely on third parties to do that, so there's not the same level of oversight. They feel that this will become even more an important factor in the future, as sales through the Internet drive prices even lower, thereby eroding the overall price issue.
Their efforts show that a smart David can indeed beat a Goliath. The "secret" is in the focus. Rather than running generic spots that simply say they have lower prices, they focus in on specific areas where they can win. A real example is much more powerful than a general statement.
If you're not the biggest player in your industry, you can use this same principle to beat your larger competitors. No matter what the size of any company, it can't do everything the best. Look for specific areas where you have a real advantage over your competitors. It may not be price; it might be service, quality, speed, customer satisfaction, or any one of a number of other factors. Use real and demonstrable examples that you can include in your advertising or in any communications with your target market. If you can establish a clear advantage over others of any size, you'll be well on your way to the future success of your business.
As David quite succinctly showed, a well-placed small rock can do a lot more damage than a large club. Find your rock and aim well.
"