Where Everybody Knows Your Name
Doing business with the small company
By Kevin Ricketts, Major League Electronics

The majority of board-to-board connectors are now being pre-designed and mass-produced by large companies for pennies per piece. So how do the smaller companies find their niche in the marketplace? Most companies will tell you they give the best service, at the best price. But how can the smaller company compete with the big guy that is able to undersell and devote more resources to a fancy website and customer service? The first and most obvious answer to that is to use your smaller size as an advantage, because in many ways it is.

Several larger companies see the value of not being big, which is why many of them try to act small. But saying you’re small, when you’re not, doesn’t always work in the global marketplace. Only the small company can make the effort and take the time to develop a relationship with their customers, even if they are halfway around the world. While email is a very efficient way to communicate with your customers, the small company can take advantage of their size and actually speak with their customers on occasion. The small company is also more likely to have the same person help their customer on every occasion, while the larger company is likely to have several people who can service a particular customer. It’s very much like the television show “Cheers”: As the theme song says, “you want to go where everybody knows your name.” This is the same niche marketing strategy that small banks use, urging the public to use the “hometown” bank with only a few branches, over the mega bank with thousands of locations. There’s a real value in being small and the business that recognizes that can exploit their advantage over their larger counterpart and remain competitive.

However, once the small company has developed a relationship, nothing will destroy it faster than late delivery of product or delivering defective or incorrect parts. While every company strives to limit these situations, they are a reality for all companies from time to time. How those situations are handled can dictate whether that customer goes to another source for their product. The small company can, if they take advantage of their size, overcome those situations in ways the big guys can’t. When there is a quality or delivery issue with a product, the small company is able to handle that situation with personal communication from a manager or higher ranking person who is more equipped to solve issues and has authority to do what it takes to satisfy the customer, while the bigger companies are more likely to have a less skilled customer service person with little or no authority handling these delicate situations. Sometimes problems like these can be turned into opportunities to strengthen the relationship, if handled positively.

Another way the small company is able to find their niche is by being flexible. The large ship doesn’t turn very fast, while the smaller boat is able to maneuver very quickly. The small company can use this same philosophy in solving the customer’s design issues. While larger companies can get bogged down with processes and paperwork, the smaller company can make quick decisions and take care of the customer’s issue much faster.

As an example, the relatively young company, Major League Electronics (MLE), founded in 1993, found their niche in the connector industry by specializing in creating custom connectors to solve design issues when the standard pre-designed connector wouldn’t work. “Sometimes the slightest design flaw in a component prototype can cause an issue that can be solved by creating a custom connector, “ said Gary England, design engineer for MLE.

A familiar story from a product engineer: “I built the prototype and plugged it in and it doesn’t work. In two weeks we are set for production. I’m in big trouble!” In doing business with small companies, the design engineer is more likely to be speaking with a decision maker who can help solve the problem, rather than an information gatherer who will need to take the problem to someone higher up. In the case above, the engineer at MLE was able to look over the schematics and design a solution in a short time. While working through the design issues, the same person was able to negotiate a price, as well. After a one-time tooling fee and a quick production run, the solution was shipped overnight, and with a week to spare, the customer had their solution and nobody but the design engineer even knew there was a problem.

“Our customers would rather do business with a great company instead of a big company,” says England. “We enjoy working with our customers on design issues and take on the challenge of solving issues. Many times the big companies just want to sell hardware and will pass on the issues that might take some time to resolve for companies like ours. That’s how we’ve developed such an extensive and loyal customer base.”

Of course, size has it’s obvious advantages, especially when comparing prices on common products, which is why the small company has to find their niche by doing the things the big guys won’t or can’t do. The small company can be hindered in helping their customers if they have a large debt, as many solutions require retooling and productions costs that are hard for a small company with a large debt to absorb. “Being debt-free gives us more flexibility to invest in our production areas to better service our customers,” said England.

At the end of the day being a great small company is more attainable than being a great big company. As the saying goes: Big companies are where small companies go to die.

Kevin Ricketts recently joined Major League Electronics as its sales manager. For more than 20 years, Ricketts has worked for small businesses in customer service and sales. He can be reached at 812.944.7244 or kricketts@mlelectronics.com.