how to own the smb market

How To Own The SMB Market

Presentation to:Institute for the Study of Business MarketsSmeal College of Business Administration at Penn State

John M. FoxVenture Marketing

Additional resources and references at:www.venturemarketing.com/ISBM

2© 2007 Venture Marketing®John M. Fox — How To Own The SMB Market ©Venture Marketing www.venturemarketing.com

Objectives For This Session

SMB-101SMB Top ChallengesObstacles to Reaching SMBsWinning StrategyAvoiding the Google Trap Door


0

500

1000

1500

2000

2500

3000

3500

1-4 5-9 10-19 20-49 50-99

*US Employer vs. Non-employer firms19.5 M non-employers5.9 M employers

80/20 Rule20% Retail/B2C, but biggest segment of 20 top segments80% Non-Retail/B2B, 16 of 20 segments

80/20 Rule20% Retail/B2C, but biggest segment of 20 top segments80% Non-Retail/B2B, 16 of 20 segments

The SMB “Market” (SMB: 1-99 employees)

Number of Employer-firm SMBs (2003) by # ees (,000) *

Source: US Census (2004)


What Keeps The SMB CEO Up At Night?

Top Challenge for more than 2/3 SMB CEOs— Sustained and steady top-line growth— Customer loyalty & retention

Most difficult job to fill —globally—— Sales representatives

Repeatable process for selling & marketing, especially through indirect channels

— Non-existent at small firmsSource: The Conference Board 2005, 2006. Manpower Inc., Venture Marketing


And SMBs Have To Deal With All The Noise…On Their Own


Why It’s So Difficult To Sell To SMBs?

1. Lack of ability to easily reach them2. Are they really small businesses?3. More than one decision-maker4. Closely-guarded, Inertia5. Segmentation may or may not be all that helpful6. Hard to correlate results from testing/trialing7. Very few gurus


Segmentation Strategies That Are Useful

# employeesRevenueIndustryEthnicityGenderAge (under 30, over 30)

Purchase behavior (e.g, # pc’s/ee, # pkgs shipped/mo)

Web-centricity/self-serve technovatorsPsychographics (personality characteristics and attitudes)

How they sell (B2B vs. B2C, distribution channels)Multi-factor clustering

Source: Warrillow & Co Research, Venture Marketing


The SMB Buying Process

1. Loosening of the status quo2. Committing to change3. Exploring possible solutions4. Committing to a solution5. Justifying the decision6. Making the selection

Early stage

Middle stage

Late stage


Breaking Inertia (From The “What-Me-Worry?” Steady-State)

1. Owner attended a seminar or read self-help book

2. New product line3. Growth exceeding 20%4. Owner personal illness5. Big increase in personal

Internet usage

External drivers

Internal drivers

Source: Warrillow & Co Research


Selling to Enterprise Firms vs. SMBs


They Rely Upon Trusted Sources

Source: SiriusDecisions, End User Tactic Survey

XXXXXAdviceLate

XXXXXSolveMiddleXXXXInfluenceEarly

Trials & DemosSearchPeersWhite Papers

Analyst ReportsWebinars

Response PatternStage

All Stages – Preferred Source


XXXXXAdviceLate

XXXXXSolveMiddleXXXXInfluenceEarly

Trials & DemosSearchPeersWhite Papers

Analyst ReportsWebinars

Response PatternStage

They Rely Upon Trusted Sources

Source: SiriusDecisions, End User Tactic Survey

All Stages – Preferred Source

Education, Independent Research, PeersEducation, Independent Research, Peers


Solutions, 49%

Education, 24%

Trial, 20%

Vendor Selection, 7%

Solutions And Education Themes Are The Most Effective For Marketing Campaigns

Source: SiriusDecisions, End User Tactic SurveyVenture Marketing research

Central Message Driving ResponseAnalysis

•The lower the sales pressure, the more apt prospect is to respond

•Buyers are looking to solve problems, not purchase products

•Print mediums trump online, web credibility

Analysis•The lower the sales pressure, the more apt

prospect is to respond•Buyers are looking to solve problems,

not purchase products•Print mediums trump online, web credibility


SMB-Trust = Value + Drive

HighMed-HighMedia (online & offline)

MediumHighCredit card &E-Commerce

LowMediumTelco/Internet

LowLowOffice Supply

LowHighBanks

Strategic DriveStrategic Value

What are the biases toward your market?


3 Key Walk-Aways

1. Develop your segmentation strategy and messaging BLTNiche thyself

2. Take on a nurturing and educational role aligned to buying cycle and top CEO challengesThe Google Trap DoorInertia and non-professional buyersThe multiplicity of buyers roles very different than Enterprise complex selling. Roles may not be filled by employees.Solve problems, not buying products2 of 3 Small Business CEOs say revenue issues are their top challenges

— Sustained and steady top-line growth— Customer loyalty and up-sell opportunities

Risk— Lack time and internal professional experts to filter and vet new vendors and ideas — Rely upon colleagues and other Small Business owners for recommendations and advice— Want the “Cliff Notes” from 3rd-party subject-matter experts to solve their business problems— Providing self-help books a proven successful outreach tactic. Print trumps in credibility, esp in older audiences

3. Demonstrate Strategic Drive and Strategic Value— Demonstrating your seriousness (messaging BLT) to YOUR chosen NICHE— Transparency— Becoming the “watering hole” for SMBs (be-one, bring-one), aggregators— Credibility

How To Own The SMB Market?


John M. Fox, Venture Marketing

John is the author of Marketing-Playbook: The Definitive Guide to B2B Marketing for Small Business. An Amazon 5-Star book—now online—has been endorsed by Seth Godin, Guy Kawasaki, Al Ries, Rieva Lesonsky, Ben McConnell and many others.

He and his team at Venture Marketing are passionate about driving top-line revenue for entrepreneurial, small businesses that sell complex products & services through channel partners.

John began his career at Intel, where he received the company's Distinguished Employee Award. Joining U.S. Robotics, while yet a start-up, John directed sales and marketing and led the launch of the Courier modem line—still the world's top-selling modem. As the 12th employee at Productivity Point International, he ran national sales and marketing—growing revenues to more than $100 million.

Fox holds an MBA in Marketing from Keller Graduate School and a BS Engineering-Computer Science from the University of Illinois at Urbana-Champaign where he is an advisory board member to the department of Computer Science.


About Venture Marketing

B2B Marketing Experts for Entrepreneurial SMB firms selling complex products & services through partner channels

Entrepreneurial SMB Firms

Complex Products & Services

Sold through Reseller & Partner Channels

B2B

Venture Marketing Sweet Spot

www.venturemarketing.com [email protected]

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