Jamie and I started ClearFit to specialize in the small business market. Why? Because there are very few companies doing it well. In particular, the big guys frequently run into trouble with this tricky market; in other words, there are many mistakes big companies make when selling to small businesses.
Many large companies look to the small business market as a huge, unexploited opportunity for growth. They do the math on the potential and agree that it’s definitely a key market for them. Unfortunately, other than identifying the size of the opportunity and deciding to target that market, few companies do what is necessary to sell successfully and profitably to small businesses. The following is a list of challenges for large companies selling to small businesses, as well as suggestions for how to overcome these challenges:
Here are Four Mistakes Big Companies Make When Selling to Small Businessess:
- Large companies assume that small businesses are all the same.
- They don’t understand how small businesses want to be sold to and what their buying process is.
- They try to reach small businesses through existing channels — the same channels where they sell to consumers and large corporations. Where do small businesses want to buy (i.e. online, phone, salesperson visit)?
- They take their current product, remove features, lower the price and say it’s for small business and think it’s ready. This makes buying and using the product complicated/time consuming for small businesses.
The Right Way to Sell:
- Segment. The small business market is very heterogeneous. Know what segments you’re after and segment accordingly, based on their relative fit with your product offering. (size, sales, industry, needs, location, etc.)
- Create real value and charge for it. Small business owners are not cheap. They just won’t pay for things they don’t need. They want good products and are willing to pay for what they need. So learn what they want, create products specifically to meet their needs — and then help them buy it.
- Market through SMB-specific channels. SMBs buy differently than large companies and they also buy differently than consumers. Make sure you’re selling to them where they buy (and that varies by the size and type of business they are). It’s also worth noting that you are most likely selling to the owner, you need to speak to them accordingly.
- Make it easy. Big companies love complicated products, sales cycles, training, pricing, etc. Small businesses are too busy to deal with this; they want a product that they need and they want it to be easy to understand, buy and use. Don’t make it hard to sign up for, understand or use your product. If there are things about your product that are complicated, make sure it’s easy for someone to get the support they need, when they need it — or remove that feature!
Reply in the comments if you know of any businesses that are getting this right. It’s hard, so let’s recognize them. My friends Kirk at Wave Accounting and Mike at FreshBooks are getting it right. Can you think of any others?
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