A client recently asked us to identify successful small businesses for a forthcoming campaign. A fairly simple requirement you might think and you’d be right at first glance. But on reflection, this is more complex than it seems. The more we looked at what the client was really looking for, the more it became apparent that success is one of those words that can mean whatever you want it to mean.
Initially, the client was looking for small businesses that are financially successful, that is, they are reporting healthy profits and are therefore worth marketing to. However sensible this definition of success might sound, there are a number of problems in framing the search this way.
Firstly, as anyone who spends much time with B2B data knows, there is a lot less information on profit, turnover and the like than we might wish for. This is for the simple reason that genuinely small businesses don’t have to report much in the way of figures back to Companies House in their annual reports. Anyone who has ever spent much time looking at the balance sheets of small businesses, trying to find useful data for marketing purposes, will be aware that a lot of what is reported has no meaning or relevance in the real world. That isn’t to suggest that small companies report rubbish to Companies House every year. Rather, that the data is often simply out of date and irrelevant to understanding what is going on inside the business.
Another fact that is often overlooked when considering financial success is that one of the main reasons to use an accountant to prepare the business’ books each year is to minimise how successful the business appears to be, in order to reduce the tax bill. Indeed, we might be better to define business success as ‘how clever our accountant is at making our business look not successful at all’.
So, even where we do have data on the performance of a small business to be able to calculate how successful it is, we need to treat this data with considerable care. Unless the business is being actively groomed for sale, then successful businesses will likely look very similar to the norm.
Further, around two million self-employed and non-limited business entities aren’t actually obliged to file financial statements to Companies House at all. Because a lot of the really useful data we would like to use is often simply not available, we have traditionally been forced to rely on simplistic solutions such as SIC code, age of business, etc. So what do we do if the data we want to use often looks dodgy, but are still interested in measuring a business by its success?
The most important thing to remember is this: we might be interested in the business, but we are probably talking to the owner of the company, or someone who reports directly to the owner. This means that the owner’s perception of the value of what we want to sell to him is absolutely paramount. The owner’s situation – for example, whether he or she is running a successful business – is in reality, more accurately expressed as ‘does he or she feel they are a successful person, running a business?’
The answer to this is probably not held in the information about the business itself. When it comes to small businesses we should be much more interested in the decision maker than in the business per se, because the decisions are made by the people who run them, not by the business itself.
Although we start by wanting to find successful businesses, we end up realising that we want to talk to successful people who are running businesses. So how do we find such people? Often, it is not by looking at their business data but by looking at the consumer data that is frequently available, on the same people. It’s not simply a question of looking for people who live in big houses or buy expensive cars. Instead, remembering that success is a function of where you’ve come from as well as where you’re going, we should look at whether house moves over recent years have been up-market or down-market; whether the business owner has moved up or down the various income predictor scales; and also whether what is happening in the life of one director is also happening in a similar way with other directors of the business.
By looking at the question in this way, we formulate the solution from a creative perspective. We start to see that the wealth of data available in the consumer space can be used to complement the business data and provide deeper insights into how successful a business really is, as opposed to whatever the data it is actually reporting.
It never ceases to amaze me how often marketers in the B2B space forget that everything is about people. The business is often simply the address at which we decide to speak with those people. [email protected]
