Big blue chip corporates think they're marketing to the small or owner-managed businesses but they're not. They're not talking to these business people.Corporates don't know how to talk to small businesses... They don't even realise that small businesses have a separate language and a separate way of being from the world that the corporates live in.
It would be a mistake to smugly picture all those small businesses as proverbial low-hanging fruit, ripe for the plucking by even the laziest corporate sales team (after they've exhausted making the big sales to the big blue chips).
All my qualitative research shows that owners of small and medium-sized businesses feel ignored and sold to in an insulting manner.
Small businesses are not the same as big businesses and they do not make purchasing decisions in the same way (frogs are not the same as small crocodiles). Yet most corporates assume that a small business is just a little, big business. Wrong.
They do not have the same mindset. Small businesses are small by choice because they hate everything that goes with the big business (energy-sapping politics, systems, processes, controls, hypocrisy, shallowness...).
Most advertisements focusing on the small business market (banks, IT, software, HR services) are not really trying to communicate with small businesses – they are not creating (or even attempting to create) a relationship, or demonstrating values important to their target customers.
Most ads aimed at the small business are relatively ineffective because the ad agency fails to understand the needs and wants of their target.
Slick, glossy ads are being produced because that’s how it has always been done in the industry. And do these adverts work? I don’t think so. 76% of people think that big businesses lie in their adverts; 78% are more likely to buy on the recommendations of others; and still the corporates think that the route to market is about advertising spend.
Marketers who want to sell to small businesses need to recognise that:
- Small businesses need to be treated differently at different stages of their life cycle
- One of the best times to communicate may be in a life-stage transition (start-up, growing, consolidating, merging, selling)
- Being patronising, smug or insincere will not get you sales
- Trying to get people to aspire to unrealistic role models is futile
- Small businesses will pay more and spend more with a brand that acknowledges their lifestyle and treats them well
22 comments:
Absolutely. The arrogance and pig-headedness of the larger companies selling to what they see as the grateful minnows is ever-present in those businesses that aim at serving the non-corporate community. There are not too many examples of people who get it right. Most national banks, business support organisations, insurance companies, consultancies, telephone companies and carriers, even small/growing business magazines claim to have a small business offering but I don't think they understand the market. Smaller businesses tend to understand smaller business and talk their language.
Jim
BL
I think you’ve hit the nail on the head when you talk about mindsets and attitude. Small businesses are a totally different kettle of fish – free spirits, radicals or mavericks and entrepreneurial to the core. The great majority, for all the reasons you list, steer well away from big corporate culture mindsets. {See Malcolm Gladwell’s article in today’s New Yorker on banks, battles and the psychology of overconfidence for an interesting article on a similar parallel theme!]. Savvy large corporates who understand the mindset differential, as well as how to use the benefits of social media to transcend boundaries and build real, authentic relationships with small businesses are likely to be successful though. Perhaps, in this current era of turbulence and global crisis, we are going to see increasingly stressed crocodiles trying to bash small frogs into submission without much success until they learn how to bridge mindsets and operate on a level playing field?!
I've only been going a couple of years, but of the three bigger clients I have one is a little overbearing, and has one occasion questioned how the work was going to get done when there's only one of me. The work got done on time and to budget, no outsourcing, but this wasn't an issue. What bothered me was the attitude. Talking to a company with a tried and tested delegation of work stucture, it's hard to address how you're not so much an allrounder, as need to understand all areas to work as you do. I sometimes think they see the skills, but not the person.
Robert
I agree with most of your blog. However I wasn't sure whether you were inferring that systems controls and processes are not appropriate for small businesses.
Most SMEs grow from even smaller beginnings and the back office usually evolves reactively without anyone standing back and looking at the big picture. However a business with say 20 people is very different to one with 2 people.
Systems, controls and processes might bring considerable benefits and could make the difference between success and failure in the a 20 person business.
Whilst process may be good for some SMEs, from both a service provision and marketing perspective it is important to realise that there isn't a one size fits all solution - flexibility is an advantage that smaller service providers have over their their blue chip counterparts.
Robert
Banks, like accountants, lawyers, telephone companies, PC World, BT, Southern Electric and Business Links have no clue how to sell to small businesses.
Their products are one-size-fits-all, they play a numbers game, amd they insist on employing people with zero social skills.
The answer to selling is NOT to send them on another Sandlers-type sales course but to first send them on a course that gives them basic social skills. Even better think about who you are employing.
Only then should you explain to them how and why and when small business people buy. Couple all that with a half decent brand and then you've got a killer proposition.
Meantime they will play the numbers game while getting ever-decreasing results and ROI cos the old ways of selling don't seem to work any more. Actually they never did work it was just that the world was an easier less competitive world then.
Without being too subtle, I attended Robert's Understanding Small Business programme when I was working at a bank. It transformed my ability to develop relationships and grow my client base ans growth in sales and profits was the direct result. I now use those same skillset to grow my own training company. Thanks.
Robert, they need you back in there more than ever.
Thanks,
Jeremy
(the one with the wife with a bra business - I am sure you remember me.)
David
re my words "energy-sapping politics, systems, processes, controls, hypocrisy, shallowness.."...
I was meaning to say that in larger businesses there is a particular brand of politics, systems, processes, controls, hypocrisy, shallowness.. all of which are energy sapping.
I have no problem with "systems, processes and controls" and in fact I encourage them in a smaller company in order to make them become more business-like in their behaviour.
Robert
Does it really matter that big business is so poor at selling to us small businesses? I'd rather deal with a small business anytime. They 'speak my language', and appreciate my budget. And because there are many more of them I can choose to deal with those that share my values.
Tony
It is absolutely essential that any business, small or large, chooses who it buys from and sells to, carefully.
There should be as much of the cultural, organisational, ethical and process matches as possible, i.e they ought to be as close as one's own business.
From what I've seen, people are generally too focused on the revenue to ask the right questions, and to do their research on a potential vendor or client.
This is why so many, like here, moan about big business this, small business that. They simply didn't do their research. In large companies, they are easy to deal with if, and only if, one recognises what their DNA and their 'modus operandi' is. It is then essential, after the research, to 'pre-wire' the relationship and whatever the proposition is, with as many of the stake-holders as possible.
Any company will ignore these steps at their own peril. One could do worse than take heed of that old ode to the appendage "It's not the size that counts, it's the quality"....
Jeremy - should we ask, "which Bank?"
I can see them at your bank right now.
"Let's sort this once and for all.
Let's design a new sales programme based on some of our new research and we'll get our training people to deliver the work.
And if it doesn't work it won't matter cos I'll be in a different departmnent by then.
As long as we are SEEN to be doing something now that's all that matters."
What can they do to realise that only a simple but results and action-focused programme could help to start to change behaviours and results. (Robert, have you any staistics here?)
BUT behaviour change is not just about sending them on a one-off training day. Look at your culture, look at who you employ and how you treat them. Look at your DNA (thanks for the phrase Andrew) and then decide what is possible. And what it is that you want. And how badly.
And if you are serious about working with the smaller busines sector, then do it with but do it with authenticity.
Come the revolution, the first to go against the wall will be...
Have a great weekend!
Bonnie
Bonnie
I won't say which bank. Modesty prevents me.
To go on about it, the banks etc don't get small businesses. They alienate most people. People buy from them begrudgingly. People don't believe their empty slogans.
Working in a cartel situation doesn't mean that you have to short-change your customers.
Just today the banks, who currently making the highest profit margins ever on their lending (Radio 4), are being asked to lend money to SMEs at a sensible rate.
Yes, they are in business and yes, we don't have to borrow from them but I believe they would lend more money and develop better relationships if they changed their whole approach to market.
But let's not 'bank bash' unless someone wishes to come to their defence.
Jeremy
ex-banker
I am one of these so called corporate people that you all seem to sneer at.
In case you don't uderstand then can I remind you that we are in business. We look for opportunities to sell our product or service and create a profit for our shareholders.
For some of us we feel that the SME market is a good place to be. We are appointed to the roles and if we hit our targets then we get promoted. We do whatever we think is necessary to maximise our profits.
If we thought that talking your language would help then we'd do it. No, my friends, the reality is that the way we do it gives us the best ROI. It works.
How stupid do you think we are? Can I suggest that you stop watching The Apprentice and Dragon's Den, reading blogs and playing with Twitter and get on and focus on running a decent business! You just make it too easy for anyone with a half-decent organisation.
The final verdict: No-one has to buy from us. But they do.
I am almost tempted to say that it is like taking candy from a baby!
Chris
(company name withheld)
Chris
I think that the point is that you could be even better and even more effective.
I question your statemnent:
"If we thought that talking your language would help then we'd do it."
This is corporate BS of the first degree. Show me some evidence that your way works (apart from the ever-decreasing ROI, the fact that none of your ads team have run a small business and that you have to rent in a customer panel to agree with you). Just one piece of evidence would be a start.
Such arrogance is why I left the corporate world. The Psychology of Over-Confidence!
Jeremy
Dear Mr Cororate please read Robert's posting "The Great Global Warming Swindle" and I quote:
"Seth Godin characterised fundamentalists by two specific traits:
- they live according to a large body of superstitions
- they are right and everyone else is wrong.
"Fundamentalists decide whether they can accept a new piece of information based on how it will affect their prior belief system, not based on whether it is actually true."" (not sure how may inverted commas are required here!)
Long Live The Revolution!
Bonnie
I totally agree. We are a Small/Medium size company ourselves, and provide IT Services to similar size companies. I believe the reason why our customer retention rate is so good is because we do not patronise, and talk on the same wave length as to a certain extent we understand their wants and needs.
Find that all the time! big biz talk about boxes and not PCs. Most 5 to 10 person operations can survive with a home network (i.e. two 5 or 10 port routers). No server required, but two or three shared printers or multi-function devices.
ES
Although I agree with the discussion headline, I'd think about running away from a prospect that had the attitude expressed in the blog! It actually comes over as a bit creepy. I tell my kids to keep away from people like that.
I think that the aspect missing from this is that you need to think about customers, not just one customer. Think about the airline business for example. Every passenger is a customer. A drunk passenger is still a customer. How drunk to they have to be before you decline to provide then with a seat? Well, every drink they consume could compromise the experience of another customer that wasn't drinking before the flight. Upset one really badly, or upset 100 enough so that they might just not come back?
If you only have a relatively small customer base, you should think of them as a member of your exclusive club. If one customer is taking much more effort to service than another, are they in the right club? Will it affect the service to other customers? Even I'm not out to sell at any cost.
MF (IOD)
Robert
Thanks for pointing me at this.
you are right, there are few great examples of great bis businesses selling well to the independent businesses. Shame on us all and think what they could do if they were only doing a decent job. Will search the site for further info.
Jane
Find that all the time! big biz talk about boxes and not PCs. Most 5 to 10 person operations can survive with a home network (i.e. two 5 or 10 port routers). No server required, but two or three shared printers or multi-function devices.
ES
I totally agree. We are a Small/Medium size company ourselves, and provide IT Services to similar size companies. I believe the reason why our customer retention rate is so good is because we do not patronise, and talk on the same wave length as to a certain extent we understand their wants and needs.
Does it really matter that big business is so poor at selling to us small businesses? I'd rather deal with a small business anytime. They 'speak my language', and appreciate my budget. And because there are many more of them I can choose to deal with those that share my values.
Tony
Robert
I agree with most of your blog. However I wasn't sure whether you were inferring that systems controls and processes are not appropriate for small businesses.
Most SMEs grow from even smaller beginnings and the back office usually evolves reactively without anyone standing back and looking at the big picture. However a business with say 20 people is very different to one with 2 people.
Systems, controls and processes might bring considerable benefits and could make the difference between success and failure in the a 20 person business.
Whilst process may be good for some SMEs, from both a service provision and marketing perspective it is important to realise that there isn't a one size fits all solution - flexibility is an advantage that smaller service providers have over their their blue chip counterparts.
I've only been going a couple of years, but of the three bigger clients I have one is a little overbearing, and has one occasion questioned how the work was going to get done when there's only one of me. The work got done on time and to budget, no outsourcing, but this wasn't an issue. What bothered me was the attitude. Talking to a company with a tried and tested delegation of work stucture, it's hard to address how you're not so much an allrounder, as need to understand all areas to work as you do. I sometimes think they see the skills, but not the person.
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