Thursday, 7 July 2011

There Is No Such Thing As A Small Business Market

Thoughts after a meeting with a corporate "about to focus on the SME Market".

There’s no such thing as the small business market.

Working with a corporate who doesn’t seem to get the small/growing/independent business thing. The client was looking to target growing small businesses (presumably with budgets to buy Product X systems).

“Wow, four million to shoot at" they said excitedly.

“Wrong", I said. Back to Marketing 101, day 1, hour 1!!!!

First, there is no small business market.
A 'market' is a group of businesses/people who behave in a similar way – a group that can be treated as similar. There is not a small business market.

The whole small business sector is diverse and knowing how to sell to one small business does not mean that you can sell to another.

Yes, there are segments, but you cannot design one strategy to reach the small business market. Or rather you can (see certain banks, accountants and business support agencies) and then it is just one huge shotgun approach, probably wasting more than you win.

Second, the reality is that a majority of this so-called market is not actually part of the market.
Wannabe entrepreneurs claim to be small businesses and end up on your database and at your events but these are people who would never buy. If say 20% of your database are time-wasters then suddenly your target of legitimate potential customers has got significantly smaller.

The tendency to over-estimate the market is the classic corporate mistake.

“Wow, four million to shoot at“ (less 15- 20% who shouldn't be included, less 80% who employ less than 5 employees leaves you with almost nothing to aim at).

What is left over is also pretty difficult to find. Even harder to reach.

Marketing to Independent/Growing/Privately-Owned Businesses - blog
SME Update - You're taking the SME - blog
"I am not an SME, you patronising ***!" - article with 10,000+ hits


Richard said...

Stating the blindingly obvious they miss so much business because of their hair-brained MBAs and smug arrogant blue chip marketing nonsense that they spout. Shame shame shame and make sure that when you do talk to the big companies taht the understand that you are frustrated that they could be doing so much better. Do NOT take any flak from them becuase they are short-changing themselves along with everyone else.

Robert Craven said...

Kind comments and glad that you recognise tha this iisnot an anti-big business thing but more of a "look at the opportunities"-type debate (and stop patronising us while you are at it!).

Horatio said...

OK Robert we get where you are coming from but this doesn't alter the fact that the big biz peopel are so out of touch. Think bankers offering to give SMEs mentoring or the News of The World being transparent to realise the IRONY and HYPOCRICY of these people.

In reality Nr C you can say what you want here because no-one would be bothered to follow or listen to you cos they are too busy looking after their own job.

How many big buisness see Twitter as anything more than a new marketing channel.

Robert Craven said...

I am not sure that these conversations are being entirely ignored. The time is just not right for them to be acted upon.


Jonathan said...

Robert seems to be sailing close to the wind. See the prebious post on banks.

His point is that banks, and big business and government don't take the SME community seriously but see them as targets for their sales. Then surely they woul dbe pretty sophisticated to maximise their ROI. They wouldn't deliberately do a poor job so maybe there is a flaw in the argument

zip code said...

you are right about uour 1 hr 1..nice post loved to read

Robert Craven said...

Thanks for the posting - apologies delaying in a reply.
Not sure why I am sailing close to the wind.
I woul dlike to think that Govnt etc would always wish to maximise ROI. It appears to me that they are missing opportunities.