When Small Isn't Beautiful

A small, unknown company may find difficulty convincing a customer of its credibility. Here are some ways to overcome customers' fears about your company's size.

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You can overcome customers' fears about your company's size

You're small. You're unknown. Why should we take a chance on you?" That's the sales objection entrepreneurs love to hate--and you may have heard it a thousand times. When your company's small size makes a potential customer question its stability and capability, no pat answer will do. In fact, how you respond to doubts about your company's future can determine whether you have any future with some buyers. "There are words all entrepreneurs fear," notes Richard Maradik, CEO of $3-million DataMark Inc., a three-year-old direct-mail-services company in Nashville, "like 'Let me come out to your place' and 'What are your revenues?' and 'Can I see your client list?' Those are words entrepreneurs fear because we're never as big as we act."

When you own a small, growing company, your best bet is preparation. Advance planning is the secret to overcoming sales objections related to size--or, better yet, making sure they never come up. Here are 10 tactics that entrepreneurs have successfully used to break the credibility barrier.

Turn your first references into "celebrity endorsements." Eric Schechter, founder of Great American Events Corp., a $2.2-million event-marketing company in Scottsdale, Ariz., wasted no time making his early customers the stars of his first marketing campaign. Schechter says he granted his first big-name accounts certain price and product concessions in exchange for endorsements. "I asked if we could use their photos in print ads, in our video, and in our direct-mail pieces," he says. In return for better terms, the customers agreed to be photographed and filmed and to take dozens of calls from prospects who'd see their faces plastered on brochures. "The testimonials made us seem bigger than we were right away," Schechter says. "They broke that barrier of newness."

Remove the perceived risk with guarantees. MTS-Group Inc., a recruiting business based in Waltham, Mass., tells potential customers that if they're not completely satisfied with its rÉsumÉ-database service in 60 days, they'll get more than their money back. They'll also get six months of free job-posting advertising on the Internet. But MTS-Group, which has close to $2 million in revenues, doesn't just blindly broadcast its generous guarantee; the company also takes steps to make sure that customers won't need to use it, according to president Dan Miller. For example, MTS asks some new customers to take a brief training program to ensure that they know how to use the rÉsumÉ service effectively.

Encourage sampling. Stephen Paliska, CEO of PPS Parking Inc., in Irvine, Calif., says that in its start-up years, his company would accept seven-day contracts with hotels that wanted to try his valet-parking service. He viewed the weeklong jobs as tryouts and says all of them led to one-year or two-year contracts. Miller of MTS-Group is also a fervent believer in product sampling and lets prospects sample his rÉsumÉ database because of what the test reveals, good or bad. "We don't want a customer we can't service," he says.

Let technology be the great equalizer. In cyberspace no one can see how small you are--and a targeted marketing campaign can succeed without a big budget. Image Soup Inc., a $2-million multimedia-services company in St. Louis, generates 40% of its qualified sales leads by broadcasting a monthly newsletter by E-mail or fax to 250 customer contacts and to another 2,500 prospects who've attended an Image Soup seminar.

Bring big partners to the sales table. It's not enough to simply align yourself with big-name companies: you've got to know when to bring your strategic partners to sales presentations. That's something Mike Klein, president of Steeplechase Software Inc., a five-year-old software developer in Ann Arbor, Mich., has learned over and over. He won a major order from a Chrysler plant in 1996, but he gives a lot of the credit for the sale to two big-company partners he brought to sales meetings with Chrysler. "We needed the partners there to pull this off," Klein says. His 75-employee company has licensing or marketing agreements with four major partners and brings in additional partners as needed.

Hire (or rent) big-name talent. Other companies look older and wiser by bringing in an outside expert to work on a project and attend all related sales meetings. Beth Armknecht, owner of the $4-million information-systems consulting firm MA&A Group, in Atlanta, went one step further and hired someone full-time from a prominent consulting firm to add depth to her sales team. "There are a lot of these people who are sick of traveling and are willing to take a decrease in pay not to travel," she observes.

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