Marketers will have a laser focus on small and midsize businesses (SMBs) this year, with 70 percent of respondents in a newly released survey by the CMO Council saying the market is extremely important to their businesses.
Yet, despite that assertion and the opportunity the SMB market presents, only 8 percent of respondents reported having a complete view of the SMB customer, according to the CMO Council's “Business Traction From Smarter SMB Interaction” report.
Twenty-three million small businesses reside in the U.S., accounting for 54 percent of all domestic sales, 55 percent of all jobs, and 66 percent of all net new jobs since the 1970s, according to the U.S. Small Business Administration. SMBs, which have fewer than 500 employees, are estimated to account for about $5 trillion in U.S. GDP—as much as the large enterprise sector.
The survey of 160 senior marketing executives selling to small businesses was conducted in tandem with information services company Penton. It also revealed that half of the respondents have dedicated customer experience resources specifically for the SMB market, but only 40 percent have a specialized department or team assigned to working with it.
The SMB market poses special challenges for marketers, which is “rife with churn,” even as it offers many opportunities, observed Liz Miller, senior vice president of marketing for the CMO Council. Marketers tend to look at SMBs as one giant segment, and that is how they have tailored their messaging, she says.
A small business with 100 employees in the agriculture sector, for example, is not viewed as having different needs because they’re in a particular vertical, she says.
Another issue is the high level of volatility in the small-business sector. “Businesses are cropping up almost as fast as they’re leaving,” she told CMO.com. “The study found marketers are having trouble keeping up with the data for their small-business customers, and that is probably the largest issue that these brands are facing,” she said.
Mastering the marketing mix is also a challenge, with 63 percent of marketers reporting they are only moderately satisfied with their current strategies. Only 6 percent of marketers believe they are extremely effective at developing compelling messages and executing measurable campaigns for the SMB market, the study also revealed.
The majority of big brands are relying either on their sales people or some type of automated solution to keep data fresh. “When you rely on the manual entry of your sales person, it makes the assumption that your poor SMB sales person has time to keep track of thousands of possible accounts,” she said, because there is no dedicated focus to intelligence gathering.
The value marketers at large brands place on the SMB market, “but how little they’re really able to listen to the market,” was surprising, Miller added. “It really comes down to a bandwidth issue.”
The study’s main finding, according to Miller, was that respondents said the SMB market is hard to work in. “There are lots of variables and lots of turnovers,” and it can be difficult to pinpoint the decision maker. “There isn’t a Hoovers’ for small businesses,” she said.
Savvy, data-driven marketers are able to look at deep analytics in their software programs to identify specific needs of customers with a very specific profile, she said. That means, for example, having a plan for how to address the needs of working moms with children who live in the western United States and own a car and home. If you’re an insurance provider, then “the goal is not just figuring out how to sell that person car insurance,” Miller said, but rather, “how do I craft a message and products and programs that best address her and her family’s insurance needs?”
Yet the survey found data gaps in basic areas, such as buying behavior insights (32 percent), decision makers (26 percent), and contact information (26 percent).
Miller says she “got a chuckle” from the finding that only 5 percent of marketers believe that the small-business market has a very positive view of big businesses, even though one in four of big brands believes it has well-established and trusted brand recognition. “I think there’s a healthy dose of skepticism there,’’ she said.
Next up, the council will be asking small-business leaders what they think of the engagements and solutions they’re getting from big businesses and what they need help with to ramp up their marketing goals.
While the main message of the study is that not all small businesses are the same, “they’re not so vastly different that we can’t learn how to effectively market to them,” Miller said. “It’s a matter of being audacious and bold about what we’re going to learn about our small-business customers to put them in that customer-centric lens.”