The rise of small businesses (and how you can reach their owners)
The exponential growth of small businesses presents a lucrative opportunity for B2B marketers. Rebecca Ley sits down with LinkedIn, Hootsuite and WP Engine to discover how they can harness it
In the UK last year, £1.8 trillion of revenue was generated by small- and medium-sized businesses: that’s 51% of all private sector turnover. Despite this, 90% of brands struggle to identify and connect with small business owners. Why? The challenge for many is understanding this diverse audience and capturing their attention among fierce competition. Tapping into this time-poor demographic could mean big business, and their pockets might be deeper than you think.
The term ‘small business’ might conjure up an image of an independent bookshop or high street bakery, but in reality, they’re much wider-reaching than most B2B marketers are aware. Small to medium businesses represent 99.8% of all EU companies – and they're spread over every sector. It’s not a demographic many could afford to overlook.
The growing number of UK small businesses is a trend that’s only set to increase, reflected by a 197,000 increase during 2017 compared with the previous year, and a staggering 2.2 million surge since 2000. Speaking about the marketing opportunities small businesses represent, Tom Pepper, head of marketing solutions at LinkedIn, says: “The opportunity is quite well known, and there is an appetite for it. There are just challenges around how to execute it.”
Knowing your customer
For the business-orientated social network, those challenges involve understanding how small businesses work and how to target them. “To engage with a successful campaign, it requires a level of sophistication in the way the marketing works,” says Tom. He cites ‘knowing your customer’ as paramount, and recognising they’re a very time-poor audience is key to this: “Your content has to stand out, engage and add value to their daily routine.”
While many small businesses use social media to run part of their business, Tom says understanding how they work online is essential to connecting with them. “They’re very highly engaged and often use social media to network with peers. You have to think of that mindset when you’re marketing to them.”
‘Knowing your customer’ is paramount, and recognising small businesses are a very time-poor audience is key
Some 70% of marketers believe the small business sector is extremely important, but knowing how to target them is another matter entirely.
For B2B marketers on LinkedIn, producing content around entrepreneurship and productivity, among other targeted topics, and using insights from data collected from campaigns, has helped their marketing efforts. “Learn about the campaigns that are working and adjust your strategy accordingly,” says Tom.
Using tools such as Trending Content – which ranks the topics that resonate most with specific audiences – you can understand what small businesses are consuming, and how. “Combine these tactics and you can target this diverse audience,” explains Tom.
The flywheel effect
Social media management platform Hootsuite wins SME customers by understanding that sometimes, they want just the same things as their larger counterparts – in particular, technology. Hootsuite’s ‘Freemium’ service - allowing free access to digital services on premium platforms – helps their smaller customers grow.
Rob Coyne, general manager EMEA explains: “It’s about winning, keeping, and growing customers. So we offer small businesses access to the technology that bigger corporations have, and let them use it in the same way.”
“We have this concept at Hootsuite called the 'flywheel' effect,” says Rob. “We believe our freemium customers will grow with us as their businesses grow, stepping up from the SME space to the corporate and then enterprise space.”
Mary Ellen Dugan, CMO at WP Engine (a WordPress digital experience platform) echoes this sentiment, explaining both small and large companies are interested in what you can offer their business: “We did a brand research study and found that for both small and large companies, if you’re not looking at their objectives, they’re not going to be interested.”
Rob Coyne, general manager EMEA, Hootsuite
"We believe that our freemium customers will grow with us as their businesses grow, stepping up from the SME space"
This also means, like Hootsuite, offering the same technology to both small and large companies: “The digital experience is one that allows a small business to break through,” says Mary Ellen. “When you’re online, the customer doesn’t know how big you are as a company, they’re looking at whether you’re fulfilling their needs.” For companies targeting small businesses, online is a great leveller when it comes to getting their attention.
In terms of engaging potential customers in this space, Hootsuite’s Rob Coyne cites Facebook as a great platform for advertising, due in large to its audience segmentation capabilities. “Facebook is very effective at allowing you to segment. You can start very small by understanding the audience you’re trying to target, and can see genuine ROI in excess of 12 times with paid ads.”
Understanding the individuality of small business owners and their needs is crucial. While millions of people are employed by small businesses across the UK, the majority of growth since 2000 is down to non-employing businesses, which account for 89% of the overall increase. Small businesses are, therefore, mostly made up of individuals who have a high amount of personal investment in their work, and are often the sole proprietor.
‘Always-on’ marketing strategy
Behind these businesses are dedicated professionals who aren’t just around for the nine-to-five payslip and are constantly on the lookout for new ideas. LinkedIn’s Tom Pepper cites American Express as an example of a business using this to its advantage, with a campaign designed to maximise engagement. “It [Amex] had an ‘always-on’ strategy to ensure its marketing was always hitting small businesses.” This meant using different ad placements across the LinkedIn platform, alongside regular measurement, enabling the marketing team to sustain consistent levels of engagement and high conversion rates.
Tom explains the Amex campaign was clever because “it really did connect to business impact in terms of results”. Using this ‘always-on’ approach, Amex was able to prove 55% of leads generated were a direct result of this campaign, and over 20% of those converted to customers in the small business space.
Mary Ellen Dugan, WP Engine
"Young entrepreneurs see themselves as the brand, so they’re very adept at the digital experience"
So it’s unsurprising that on average, two-thirds of the B2B buyer journey now takes place online. Subsequently, small business owners will be as receptive to marketing on a Sunday evening as they are on a Monday morning. As WP Engine’s Mary Ellen Duggan stresses: “Small businesses are savvier today than ever before. Young entrepreneurs see themselves as the brand, so they’re very adept at the digital experience.”
Getting the most out of your strategy for small businesses also means analysing the data from campaigns and using those insights to further inform, explains Tom. “Sometimes it’s a surprise, and our messaging uncovers a new audience,” he says. “You’ve got to be responding and reacting all the time.”
For WP Engine, its strategy has involved a range of advertising videos addressing common business problems, such as e-commerce, that affect this sector. “We created our own publication for developers and one for marketers to start the conversation about what they need,” says Mary Ellen. The company also redesigned its website to demonstrate how WordPress can help small businesses, essentially becoming its ‘own product demo’.
The future of marketing to small businesses
This is, of course, absolute best practice, and it will be a long journey for many brands to get to this level of measurement and customer behaviour optimisation. But advancing technology will help marketers better understand their audiences and how to target them. “The ability to measure the success of campaigns is always improving all the time,” says Tom. “Video can help lift brand awareness and engage, and help with that reluctance [to market to small businesses].”
There’s an assumption this sector has very small budgets and, therefore, there’s less business to win, but these companies are often trying to aggressively grow market share, and have relatively deep pockets, explains Tom. This might be a reason for brands shying away from marketing to small businesses.
Rob Coyne, Hootsuite
"Industry bodies miss a trick, and we should be doing more to educate them on what small businesses need"
Mary Ellen agrees there are some misconceptions around marketing to small businesses. While WP Engine can segment its audience by industry, namely media and publishing, technology and Fortune 500 companies, Mary Ellen says casting a wide net is still an effective strategy for this diverse audience. “We spent a lot of time last year building general awareness. Our brand metrics have paved the way to nurture small companies and make ourselves known.”
Despite varying resource limits, marketing to small businesses presents a huge opportunity to any brand, and the future of targeting them could involve cross-company collaboration. Hootsuite’s Rob Coyne says: “Industry bodies miss a trick, and we should be doing more to educate them on what small businesses need.” For Hootsuite, this is an essential part of growing its business.
And if you needed any further convincing, Rob summarises neatly: “They [small businesses] represent a critical piece of any business model. As they play such a critical part of the value chain, continue to target them.”