The small business market is one that often clumps diverse businesses together. Molly Raycraft uncovers the characteristics that can differentiate them
Despite individual company size being relatively small, the SME market is a hive of activity. In fact, small businesses represented an imperious 99.3% of the UK private sector at the start of 2017, meaning there’s a huge variety of different company types, sizes, and owners out there.
So, why do so few targeting this burgeoning market fail to recognise the variety of small business personalities and features? Owners of small businesses see their company as unique and a part of their life. That means B2B brands adopting a ‘one size fits all’ approach are likely to do nothing more than repel. And the answer here, like most customer attainment problems, lies with understanding your customer base.
Many struggle to wade through the sea of small businesses out there to fish for those actually interested in what they have to offer; 90% of brands struggle to identify and connect with small businesses. But by understanding small business characteristics, a marketer can build a rock pool of prospects, who will respond positively to a targeted approach.
Here are just some of the characteristics to consider when segmenting those you want to market to:
Agile
Small businesses are the race cars of the industry and can swiftly change direction and pass go on new ideas at the blink of an eye. They don’t want to be sat in neutral waiting for a supplier to catch up – so says Mike King, co-founder of Eleven Hundred Agency. “Many [small businesses] are used to making decisions quickly and when they do, they often expect a similarly fast response. If you’re selling to SMEs, you need to be ready to jump as soon as they say yes.”
Judith Niederschelp, MD at Aberdeen Group Europe, agrees. “Small businesses expect the same [agility] from the suppliers and partners that support their business. Indicate how your offering can facilitate and accommodate agility. Demonstrate that you have a finger on the pulse with content that addresses the issues that matter to their industry.”
Time-stricken
The decision-maker in a small business is likely to be the owner themselves. They’ll be juggling the lion’s share of the entire business’ operations, so they’ll be time-poor and unable to spend ages looking over your marketing collateral or 20-page value proposition. Ellie Smith, senior account director at The Marketing Pod, says this puts a greater pressure on your marketing to be accurate. “It puts extra emphasis on marketers to ensure communications are highly relevant, timely and tailored if you are to achieve any cut-through,” she explains.
Mike seconds this. “People working for SMEs are usually very busy covering a multitude of areas. To reach them, your pitch needs to be concise and very easy to digest. When it comes to SMEs, less is definitely more.”
"To reach them, your pitch needs to be concise and very easy to digest. When it comes to SMEs, less is definitely more"
Ellie uses one of The Marketing Pod’s most successful SME campaigns as evidence of a successful targeted approach. The direct mail campaign, which included personalised communications on a postcard containing pre-filled details, received a 26% response rate. “Eye-catching design that differentiates, coupled with very targeted messaging that really resonates can make a big difference. But if you want them to respond, you have to make it easy,” she says. “Postage was paid, so all the small business owner had to do was remove the postcard, complete the final details and post it.”
Smaller budget size
The budget of a small business is likely to echo its size. They won’t want to pay out exorbitant fees for extra services that aren’t essential to their business. It’s like buying a jar of assorted sweets just to eat the flying saucers. “Small businesses are usually unwilling or unable to make long-term financial commitments,” Mike warns. “Offer different pricing options and be prepared to start small with a menu of options so you can grow the business as the value you deliver is understood more.”
Although a small business’ budget may seem measly compared to a corporate, it’s likely to represent a considerable portion of their expenditure. Ellie says it’s not enough to have a compelling message; small businesses need to see value. “Make sure your marketing activity is packed full of relevant proof points that your small business audience can relate too,” she advises. “It’s not enough to go out with a global SME message. A small retailer simply doesn’t have the same set of issues as a small manufacturer or professional services provider.”
The Aberdeen Group’s Judith agrees, adding SMEs face a lot of pressure in making the right purchasing decision, so want a company they can trust. “Deciding what to invest in is a major challenge for SMEs. Striking a balance between growth-driving initiatives and measurement to protect the business is never easy, and mistakes can be costly,” she explains. “Expert guidance to ensure such decisions are purposeful and well-informed is invaluable here. Carefully crafted content and contact strategies can ease the buyer journey, enabling SMEs to overcome potential obstacles more easily.”
Expertise
Don’t underestimate small business owners because of the size of their enterprise. The small business market is known to be a ruthless environment, and an entrepreneur willing to enter it will be confident in their knowledge in the field.
It’s vital you don’t attempt to target the entire market in one fell swoop, as these experts will quickly realise you know nothing about their area. “They have chosen to plough their furrow in their particular field because they know it inside out. To make an incorrect assumption will undermine your credibility,” warns Ellie. “Research the environment in which your small businesses targets operate – how can you add value for them? How can your expertise complement theirs and advance their business?”
“Some of our longest and most profitable client relationships started out as small businesses with tiny budgets"
But Mike disagrees; a small business owner or employee can be thinly spread across multiple aspects of the business, meaning knowledge of some areas could be patchy. “It’s likely the decision-makers you need to reach are wearing many different hats within their own business,” he explains. “This means your sales and marketing messages need to be clear, concise and easily comprehended. Avoid the use of jargon and specialist terms if you want to be understood.”
Furthermore, Mike recognises how daunting setting up a business can be, and provides his own experiences in working with them as to why you should be offering more advise than other larger prospects. “Some of our longest and most profitable client relationships started out as small businesses with tiny budgets,” he says. “The time we spent in the early stages hand holding and showing how we could help them grow ultimately paid off, although, it often felt disproportionate to the size of the business we were initially chasing.”
They don’t work 9-5
A lot of small businesses won’t stick to the usual nine-to-five you typically base your marketing activity around. The personal and working lives of small business owners will often merge into one non-stop cycle. Suss out what times they’re most active and market accordingly. “If you send them an e-shot at a time when they’re away from emails or not working, then it will be missed,” explains Ellie. “Similarly, breakfast meetings might be great for some sectors but certainly not for a small business in catering that starts early. Think about their working day, put yourself in their shoes, and you’ll be more effective.”
Locally situated
When small businesses are operating in one concentrated location, companies outside of that area can seem a world away. SME owners are wary that interaction with a vendor or agency located far away often results in the rigmarole of unfinished email chains and long response times – this doesn’t translate well to the agile nature of small businesses. “Some SMEs prefer to work with local firms they see more regularly and have a personal relationship with, helping them to feel more confident about their partnership,” explains Ellie.
Small decision-making units
It’s common knowledge smaller businesses possess small decision-making units, but in some cases, said ‘unit’ may even just comprise the owner of the business.
Having such a clear idea of who the decision-makers are presents a great opportunity to understand the purchasing habits of your prospects and their needs – something Mike believes is important recognise. “Decisions are made by small groups of people or even individuals, so it’s important to get to know the personalities involved and what motivates them when it comes to buying decisions,” he explains. “Although there are a lot of SMEs out there, one size definitely doesn’t fit all.”
Judith agrees – after all, the small business market is a diverse one, so it’s only right to get upfront and personal. “Segmenting by industry sector or region is good starting point, but a more focused approach will deliver better results. Build a detailed profile of your ‘ideal prospect’ based on characteristics of existing customers. This involves drilling down into customer and prospect data to align relevant factors such as annual technology spend, installed assets or annual growth rate.”
Easily caught up in regulation
The waters of regulation, legislation and industry guidelines can be difficult to navigate, and small businesses will be looking to seek knowledge on how they can remain buoyant. To build a good working relationship with your prospects, Judith suggests identifying these challenges and help your prospects get clued up on how to overcome them. “If you offer a data protection solution, don’t rush in talking about its key features,” she warns. “Instead, you might produce a guide that identifies and addresses issues related to GDPR. This can go a long way to raise awareness and build trust, while implicitly conveying your organisation’s expertise.”
SaaS cybersecurity company SharkGate helped small businesses that had been victims of cybercrime by creating a dedicated website called 'One hour site fix', which promised to fix a website fast and free, as long as the company then took out subsequent cover. This campaign not only proved that SharkGate protects websites, but also demonstrates how to establish high levels of trust by understanding the pain-points of your customers.
Judith recommends a similar educational approach if you’re looking to sell anti-cybercrime solutions, as, she explains, small businesses are a greater risk of long-term damage from ransomware attacks due to their lower in-built resistance. “If you offer services that help SMEs de-risk, consider the merits of webinars, papers or events that explore the full scope of a best-practice response, not just your solution,” she encourages.
“Collaborating with buyers when they face complex decisions about new technologies – covering cons as well as pros – can earn respect, aiding acquisition and retention alike,” Judith adds.
Competing with bigger players
Although they may be the proverbial cub of the pack, if they have aspirations to grow, a small business can ultimately take on the alphas of the pride. While their agile nature swings in their favour, Judith says they can sometimes lack the muscle to pack a punch against corporations. “If your offering can help them work smarter to steal a march on the competition, find a way to improve it,” Judith recommends. “Analyse data about your targets’ latest business wins or growth patterns to identify trends and understand the type of customer or buyer they’re courting.
“Use this insight as a basis for communications that show how your offering can facilitate differentiation and lasting success.”
