Don't Underestimate the Power of Emphasizing Stakeholders
It’s getting increasingly tough for small businesses to compete with their larger competitors. This is especially so when it comes to bottom line prices. While price will always be one of the main considerations, we know from our own experience that customers are not always motivated by price alone. Businesses can differentiate themselves by adding value in a variety of ways.
What would make a customer choose a more expensive service or product from a small business over a cheaper selection from a large competitor? Quality and convenience are the first reasons that come to mind-- and small businesses should always aim to go the extra mile when it comes to quality and convenience.
Other types of added values could include rewarding loyalty and innovation. Being small means being better positioned to know your customers’ needs. Often this can happen through direct conversations or by being right there on-site. This makes you better able to focus on your products or services-- and small businesses should always be aiming to try out new ideas. Whether in sales promotions or new services, always having fresh ideas, will ensure you will remain visible to existing customers as well as potential customers.
In today’s image-conscious, fast-paced sales marketing environment, branding is a crucial way in which a small business can differentiate itself. This is a matter of not only getting one’s company name out there, but of creating a positive impression in potential customers’ minds. One very effective manner in which this can be achieved is through local contribution activities that tell potential customers “we are part of the community and we stand for something.” Local contribution speaks volumes. People have always voted with their wallets, and people still do care about business practices.
The Shareholder versus the Stakeholder – A Perspective from Japan
For over a decade now, “stakeholder” has been a buzzword in Japanese business. And, not only is it a buzzword but it has become a central axis around which management decisions are made. This is because it has become increasingly clear that corporations cannot exist in a vacuum and that if shareholder profit is the sole rationale behind all business decisions and activities, we run a real risk of seeing the complete disappearance of small business and of local economies.
In Japan, shareholder capitalism versus stakeholder capitalism is particularly emphasized in the growing field of corporate social responsibility (CSR), where corporations are encouraged to make decisions and implement practices which move beyond shareholder profit and seek to emphasize long term sustainability within a community. Not only will this ensure the longevity of a business but it also serves as a counter-balance to some of the recent disturbing trends we have been seeing in big-business practices, Wall Street, and vulture capitalism.
What is a stakeholder?
Stakeholders are everyone with an interest in that company. Going beyond interest in financial performance alone, it is a more general interest in the company. This will include not only the business owners and any shareholders, but will also encompass its employees, business partners, distributers, customers and the local community where the company is physically located. Indeed, when it comes to corporate governance, the general public is now considered as a stakeholder.
Nowhere is this more crucial than for small business; for small business remains rooted in its local community. It matters. People in this country are increasingly harkening back to the “good old days” when businesses were part of local economies—providing employment and contributing socially. This will increasingly become important in the age of corporate social responsibility, and your business can convey a positive impression and get its name out there in some very easy ways—by just showing the ways your business cares.
Typically, large corporations donate money or are involved in large-scale welfare projects. What we see in Japan, however, are companies—large and small-- striving to have “skin in the game” with stakeholders. This means employees and owners getting out and volunteering and making in impact in the places where their companies are located or do business.
Below are some ideas gleaned from Japan that could make a real difference in your company.
Things to Consider
· Company shirts. Having company shirts is an effective way to advertise. When you or your employees are out in the community –especially if you are engaging in a social contribution activity—be sure to wear your company shirts.
· Volunteering. Give an incentive to your employees to get out into the community with you to participate in a local contribution activity. Be sure to wear your shirts and post on Facebook and elsewhere so your stakeholders know you care. Posting photos to Facebook or on your company website will enable your online customers to be aware of your contributions.
· Social Contribution activities can include: Feeding the hungry at a soup kitchen or in churches, lending a hand at nursing care facilities, jog-a-thons, neighborhood cleanup events, tree-planting, participating in blood drives, etc. People notice.
· Being Green. This is another way in which you will display your commitment to your stakeholders. This could include using eco-friendly packing materials and better logistics practices if you are an online business, or by just getting out there and picking up trash in the local community if you are an old-fashioned business with a physical commercial location.
· Employment. By being a company that provides decent employment, you will be increasing your brand name. Being a company where people want to work and are proud to be a part of will provide a strong impression and increase your company’s longevity and significance.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net.