Why SMB marketing is so hardBefore I go any further, let me be clear that ‘going after SMBs’ is a perfectly valid decision. And there are loads of companies who’ve done a really great job of targeting them (I should say us). But the way you market to SMBs is complicated by a number of important factors. 1. SMBs don’t self-identify as SMBs. They identify as ‘B2B content marketing agencies specializing in technology’ and ‘family-run trucking companies’ and ‘eCommerce software vendors’. The only reason you’d self-identify as the owner of a small business is if you needed to clarify you aren’t the owner of a large business. This is the classic SMB challenge. The people marketing to them describe them in ways they don’t describe themselves. 2. There are a lot of SMBs. Let’s say we move past the fact that there isn’t a common definition of SMBs. We’ve still got to confront the fact that most businesses are small and medium sized. And I do mean most. In the UK, 99.9% of all businesses are small or medium-sized. In the US, they make up 99.7% of all businesses, with 89.6% of all businesses having fewer than 20 people in them. So when we say we’re going to ‘focus on SMBs’ we have to realize we aren’t really focusing at all. We’re actually making our segment even broader than it would have been had we gone after large enterprises only. 3. Size is a weird metric. If we’re going to measure the size of a company, or more pointedly, qualitatively segment our potential market based on size, we need to accept the limitations of ‘number of employees’ as a metric. Here, the lack of a common definition doesn’t help. For one thing, a 100-person company is scarcely like a 700-person company. So a 0-1000 employees segment doesn’t work. And yet some programs might exclude a 120-person company because they don’t fit their 0-100 employees segment. That’s just weird. But ok. Let’s once again, pretend we’ve agreed on a common definition. Now there’s the question of size dynamics in different verticals. Is a 13-person tech company really ‘smaller’ or less attractive a prospect than a 400-person publisher? What if I told you that software company was Instagram and that publisher was Gawker? ‘Number of employees’ might be an available metric. At a push, it’s even good to know. But is it really enough detail with which to segment your potential audience? I’m not so sure. Put it this way: if you’re selling Martech wouldn’t ‘number of marketers’ be more useful? 4. ‘SMB’ is not a vertical. It’s a collection of verticals. It always worries me when I see someone group SMBs with verticals like transportation and insurance. Because it’s a fatal misconception to assume the SMBs we’re targeting aren’t players in exactly those verticals. Case in point: a 300-person call center has more in common with a 3000-person call center than it does with a 300 person manufacturing plant. If you’re going to sell to Velocity, you’d better know a thing or two about how an agency business model works. 5. SMBs don’t buy like big companies do. Big companies have buying teams and procurement departments and implementation challenges that come with scale. Smaller companies have a smaller gap between the person having a problem and the person who can do something about it. So, often in SMBs, there’s an equally short gap between identifying a problem and then identifying the solution to that problem. Of course, SMBs can take too long and be too conservative with their purchases too. But if your current marketing mix was built for huge buying teams, don’t be surprised if the end-user in an SMB finds it hard to navigate.
Why companies go after SMBsOk. I’ve just said a whole bunch of stuff. So let’s come back to our initial premise for a second. If ‘going after SMBs’ isn’t really a clear strategy in and of itself, why do so many B2B companies still do it? Like I said before, I don’t think companies targeting SMBs are making a bad choice. They’re actually making an important strategic decision (i.e. one that ‘closes doors’).
- They’re saying they won’t sell to large enterprises. If the enterprise space is saturated, or the small business segment is under-served or the solution was made specifically for small teams that’s probably a good move.
- They’re aiming for volume sales over a few big fish. Again, a useful strategic decision. If you can pick up many small deals that are relatively uncontested as opposed to many big deals that wouldn’t even consider you, you should certainly make that move.
Getting SMB marketing rightGetting this right isn’t about any one silver bullet. It’s about doing the simple things well. 1. Get specific: ‘99.9% of all companies’ and ‘every vertical’ is way too broad. So look for ways to segment some more.
- Target specific issues: Ideally, you’re already doing this. But aim for issues that matter most to small businesses. If you’re improving processes, pick the ones a small business needs the most. For instance, one of our clients uses a lot of examples about processes that improved visibility into cash flow – always a challenge for small businesses.
- Target specific psychographics and firmographics: If ‘heads of sales in small businesses’ is too broad, go after ‘heads of sales in start-ups’ or ‘heads of sales in growing companies’. Depending on the stage your best personas and prospect companies are at, they’ll have different issues. A growing company is different to a new company is different to an old company is different to a willfully small company.
- Target specific verticals: This scares the bejesus out of most marketers. But going vertical-specific shouldn’t mean putting all your eggs in one or two baskets. Produce general content for most prospects. At the same time, keep some budget aside for one high-propensity vertical. If you can see uplift in that one, go after two more.