It’s our job here at Startups to champion innovation and the best emerging small businesses. One of the greatest advantages of being a small business owner is that you remain close to your customer; you can interact with them, understand, adapt and react quickly to their needs – unlike many big businesses.

Too many large companies get lost in mission statements, strategy and the financials and lose touch with what they once set out to do – provide a service people want. This week a couple of spectacular examples have come to my attention:

PC World once epitomised poor customer service and has since invested heavily in staff training. Hmm… shame it still can’t get the basics right. When Startups visited its Fulham branch to buy an HP printer cartridge our request was met rather unhelpfully by, ‘sorry I’m an Epsom representative you’ll have to ask someone else’. Is it too much to expect a sales assistant to know about both brands?

HMV next. How come you can buy a DVD online and return it completely packaged and sealed for a full refund, yet buy the same DVD in store, return it in the same perfect condition with valid receipt and it’s exchange or gift voucher only?

We asked why. According to HMV’s head office online retailers are legally obligated to offer a refund within seven days and stores aren’t. So, just in case that’s not clear, HMV does what it has to legally and nothing else – and it wonders why it’s taken beating after beating since the internet arrived?

While HMV is good at laying down bureaucracy it’s not very good at following it.

Singer-song writer Daniel Rachel was denied his first Top 40 hit last week thanks to a catastrophic mess-up by, you guessed it, HMV. His single, ‘Let It Be Mine’, was released in support of arts organisation Tender, which campaigns to stop domestic abuse and sexual violence.

With all profits going to Tender, the organisation and Daniel had orchestrated a well-backed viral media campaign with 1,000s of pledges on sites youchartit and Facebook.

Encouragingly it reached No.14 in the Saturday Amazon chart ahead of the likes of Artic Monkeys and Amy Whinehouse, yet come Sunday it was nowhere to be seen in the official single’s chart.

Bemused, Daniel contacted the Official Charts Company (OCC) to find out why and was told HMV and, unbelievably, Amazon, had failed to register a single sale. By tragic coincidence, another giant, iTunes, managed to miscode the single and so also contributed zero sales. Both HMV and Amazon have blamed order technicalities but Daniel, after checking with suppliers, is adamant the blame lies firmly at their door.

Interestingly he had no such problems distributing the single directly through his own independent record label and smaller traders. “I guess the message is don’t trust the conglomerates when you’re an independent. Their interest is in global selling artists at the expense of the relatively unknowns.

“Meanwhile sales at grass roots base through direct service from label to customer works without mishap.”

The lesson? Big companies continue to cater for the masses – and increasingly they can't even do that well.

Even the internet age is not without its faults. Have you ever tried to actually speak to someone at eBay or Amazon? If anything, the internet has allowed companies to become even more corporate. Faceless organisations whose only forms of communication are ‘contact us’ emails prompting automated responses spouting meaningless 'policy'.

The growing consumer drive for ethical transparency detailing how products are sourced and manufactured has already broken consumer obsession with ‘price’. As we become increasingly choosy about what we buy, we’ll naturally widen the number of companies we buy from and that’s good news for small companies.

You might not be able to compete with larger businesses’ buying, distribution or marketing powers but you can certainly carve your own niche by responding to what customers really want, whether that’s better ethics or simply great customer service. Small should be the new big.

By the way, if you’d like to buy Daniel’s single, all profits still go to Tender. More here.