What big businesses should know about marketing and selling to small businesses

Steve Patrizi, Director Of Advertising Sales At LinkedIn Corporation, posted a simple and powerful question in LinkedIn Answers:

According to the U.S. Small Business Administration, there are more than 26 million small businesses in the United States (defined as having fewer than 500 employees) representing 99.7% of all employer firms - clearly a significant market and one that many larger companies are interested in targeting. What are some of the key strategies that larger companies should (or already do) employ in marketing, advertising and selling to this important segment?

Some of the responses included:

Fran Simon, Vice President, Special Projects at Teaching Strategies, Inc.

Large B2B companies focued on the business needs of smaller companies need to listen to their clients for information that will guide product development and service offerings. What works for a multi-national congomerate won't always work in a smaller company. The clients are the best source of information about what works and what does not. The challenge is to find meaningful ways to gather the information and then to turn the information into viable business models and products. Product offerings for smaller businesses need to include products that can scale to size and be priced accordingly. Reps for large B2B companies need to understand that potential clients in small businesses believe in relationships. They want to FEEL as if they are just as important and valuable as larger clients, even through that might not actually be the reality.

Salman Khan, Owner, Salman K Khan Business Coaching Services

From my experience, address the needs of the small business owner. Most of the time it comes down to "show me the money". Any business that can create "value" for the small business will win. Small businesses are constantly bombarded with people selling them stuff. Also, many large businesses compete with small businesses. Strategic partnership where a mutually beneficial relationship exists would be the way to go.

Rich Taylor, Director, Business Development at Ipsos North America

The big businesses who market well to SB know that the most important thing is to establish an emotional connection. American Express stands alone as an incredible SB marketing success not becuase it's a better product, but because they established a feeling of "prestige" and "respect" for their brand. Similarly, Avis solidified it's place in the car rental market by appealing to SB owner's work ethic (We try harder). Dell outgrew IBM, Gateway and others by making it "Easy as Dell" for SB owners. Far too many companies focus only on product and service messages to SB owners. In doing so they believe simply offering the prospect something he/she needs will be enough to persuade them to buy. Not so. While the prospect may in fact need what the company has to offer, SB owners are generally an extremely cautious bunch. They can't afford mistakes that waste time, money and precious resources. As a result, they delay many rational decisions (sacrifiice) until a decisoin feels right. Appealing to the emotional needs of SB owners (and managers) is a big key to success. More big businesses would be well served by trying to connect with the underlying feelings and emotions SB owners have.

Regina Jaslow, Marketing Turnaround & Growth Specialist / Rainmaker

Small businesses usually have do not have much manpower nor deep pockets, and are constantly squeezed by large competitors. Big businesses selling to small businesses need to create convenience or ease of buying that does not consumer precious time, offer delayed payment plans or other creative ways to delay/lower cash outflows, and provide solutions to boost revenues and profitability so that the small business can compete more effectively (e.g. buy at same cost as large competitors, offer separate unique product/services lines that are specifically never sold to large firm, offer marketing support such as co-marketing or tap in-house creative services) against the large firm.

Deb Kolaras, Copywriter & Small Business Coach

Some key strategies I see that could be advantageous:

-Not making the small business FEEL small even if they are
-Making it easy to business with them
-Making sure their point of contact has the authority to act on behalf the company
-Quick turn around on ordering and returns
-Hands on care and attention
-Really understanding their position in the market place and helping them claim more market share
-Being mindful of their time and resources

There's so many ways, the list is endless.

Becky Smith, Founder and CEO at TriageTraining Group

As a small business owner, I award my business to the firms whose expertise fills gaps in my own "bench strength" - Historically, large firms feel they've done all they need to do when their product "works as promised" and they focus on legalistic or technical aspects of Service Level Agreements or contractual promises. The real traction begins when they treat my purchase's "works as promised" confirmation as table stakes and go the extra mile to ensure that it "works as needed". The same is true for the training and on-boarding I get. Most large companies feel like they've done all they need to do when they tell me/show me "how it works" - the great ones help me apply it in very process-specific ways and ensure that my comprehension rolls up into powerful mastery for "How we use it here".

Mark Nissley, Driving Performance in Growth Organizations

There are many great answers here. I'd echo the comments about making an SB owner or manager feel important. They want people to know that they are a "rock star", that they overcame insurmountable odds to get where they are and deserve a gold medal for the effort. I have three sub-points to add: 1. To support the "rock star" perception, it is important to treat the SB owner as an "award winner". The sales presentation should be driven by overwhelming value of "red carpet" items that the selling company is "awarding" the SB for its greatness. Structure the sales presentation to give away ancillary components while selling its core component, or vice versa. The important thing is to give great value as a reward for just being an SB. 2. The sales person must present immediately how they are going to promote the small business as a big business. The #1 concern on a SB mind is how to grow revenue. They see any promotion as meeting this end. That promotion should portray their business as an "impressive" company, this is almost more important, than the actual bottom-line value. Presitge, such as noted above with AmEx, is a brilliant way of doing so. SB owners want to see there name in equality with a Fortune 500 company. For example, in the advertising business, they want to see their ad rotated with IBM's ad, or beside it, and every bit as pretty. 3. Pick a niche service. Small business owners are very suspicious of comprehensive business solutions. (If a comprehensive business solution existed, they would have thought of it themselves, right?) Then offer the greatest value in that niche. See points above.

Small Business Market Poised For Continued Growth

Administaff released their latest Business Confidence Survey of small business owners after interviewing over 5,800 of them with their questions. Here are some of their findings:

• More than 82 percent of small business owners said their companies were growing on schedule or at a faster pace than originally predicted at the beginning of the year
  
  
• 59 percent said they are meeting their initial business projections this year, 23 percent said they were exceeding their initial 2007 expectations
  
  
• Half of the survey's respondents said they were hiring additional full-time employees, 13 percent were hiring part-timers to fill in work force gaps. 41 percent were making do with existing staff
  
  
• 61 percent of small business owners are attempting to attract older, more experienced workers
  
  
• Employee compensation was up 6.4 percent, with commission rates increasing 11.7 percent over second-quarter 2006. Overtime pay was 10.2 percent of regular pay
  
  
• 58 percent of respondents said a competitive salary or wage package is the top incentive for attracting new employees, while 26 percent pointed to a good benefits package. Others cited flexible scheduling, training and development, and vacation and additional paid time off
  
  
• To retain employees, 47 percent of companies offered higher salaries, 46 percent provided workers with "new challenges and responsibilities" and 35 percent extended opportunities for advancement
  
  
• Fifty-three percent said the greatest issue is "hiring the right employees," while 31 percent cited the cost of medical insurance coverage and 29 percent were concerned about increased competition from other businesses. Other concerns included economic conditions, the housing market, capital issues and regulatory compliance

Evan Carmichael

Understand SMBs By Reading Related Forums

One of the biggest challenges that large corporations have selling into the SMB market is that they do not have a sales force that understands what it is like to be an entrepreneur. I have discussed on a number of occasions in this blog the benefits of hiring sales staff who have either run their own businesses in the past or have been involved in some way in the SMB community. Entrepreneurs are very much relationship oriented buyers and appreciate someone who understands their problems.

So what can you do if you want to get a better handle on what entrepreneurs are thinking about? Join a few entrepreneur forums. Many business owners turn online when they have a question they are looking for an answer to and join an online community.

In our own Entrepreneur Forums, for example, we cover topics from starting up a new business to sales and marketing to franchising to women entrepreneurs. With 11 different categories there is something for everyone here.

Browsing around the forums will give you a sense of the hot topics for entrepreneurs today. Some of our popular topics include: Facebook: $3,200 in new revenue, Blogging For Promotion,
and Finding Good People.

By better understanding what small business owners care about you can better target your pitch to them to maximize the chance of closing the sale.

Note: There can often be a strong desire to sign up for an account and promote yourself in these types of forums. This is typically frowned upon by the entrepreneur community. You should be there to ask questions or propose solutions - not to promote yourself. Self-promotional forum campaigns often backfire and will generate negative opinions of your firm.

Evan Carmichael