How does a small business compete?

There’s a secret about Internet marketing. Some small businesses are ecstatic about their success on the Internet, but others can’t seem to get any traction. I believe that one factor often separates the winners from the losers—focus.

The good news about the Internet is that it is very cheap to reach your target market. The problem is that it’s cheap for everyone else, too.
So optimistic small businesses that said to themselves that now they can go nationwide or international or intergalactic sometimes succeeded, but at other times found they couldn’t get a word in edgewise with all the other companies that had the same idea. Companies that they never competed with in the past now can compete with them.
So the popular search keywords are awash in competition. How do you sell digital cameras if everyone sells them? How do you attract searchers for that broad a term? If you need to land on the first page of search results to get sales, how do you do that as a small business?
Focus.
The small businesses that are succeeding are marketing very targeted offerings—extremely specialized products and services. That way, they take advantage of The Long Tail effect to get on the first page of search results for something (even if it is somewhat obscure) and they have a good chance of satisfying the customer with what they do best.
But it means that you must specialize, you must focus on a niche. You can’t just say, “We are a local bedding shop and we sell mattresses.” So what? You must ask yourself some very hard questions about your business.
What is unique about your products? Or your business? Or the way you sell them? What is it that makes you better than everyone else for a certain specific target segment?
When you answer that question, you’ll know how to market yourself on the Web. You’ll know what that segment is looking for and you’ll know how to attract them with the right message. It’s not possible for a small business to really be good at everything—you need to know what you are uniquely better at—even if it is just a small segment that cares.
If you sell beds, do you solve sleep problems? Fashion problems? Allergy problems? What exactly do you do better than everyone else? If you tell me that you offer the same products people can get anywhere for the same low price they can find elsewhere, that is not a good answer. If you make vague promises about great customer service, that won’t cut it.
A small business must specialize to succeed on the Web. What’s your specialty?