What are the highs and lows of selling to the SMB? We decided to find out by asking a few questions of some industry leaders, giving them the opportunity to answer some or all of the questions. The answers, like our panelists, are diverse, surprising and informative.
What do you like/dislike about working with the SMB customer?
Gordon Snider: There are many great things about working with SMBs, including the lasting friendships that often develop, but the most professionally rewarding has to be their ability to adapt quickly to changing market trends. Successful SMBs are typically run by problem solvers and that’s just exciting to be around.
Lou Stricklin: SMB customers in general make decisions much faster than an enterprise account. They’re more willing to take risks (albeit small risks) and try out new technologies, solutions and applications to help improve the business. SMBs are typically loyal and sales can often be centered around relationships — this can be viewed as good or bad depending on whether you’re the incumbent or newcomer to the account.
Larry Trevarthen: The SMB customer is a terrific customer to serve, because they are looking for support from OEMs and the channel, they can evaluate and make decisions quickly, and they provide fast and valuable feedback for future products. Working with them provides a great ability to enhance your solutions. To be successful with them, it’s critical that you have strong channel relationships that can augment and support your message since the SMB customer will typically look to the channel for information and purchase.
Stephen Young: I’ve always enjoyed working with SMB customers because of the tremendous impact we have on their overall business strategy. SMB customers are frequently looking for an edge; a differentiator that will allow them to compete in a larger and sometimes even global marketplace.
How an SMB customer uses every resource is far more important than in an enterprise environment. Resources are limited in an SMB scenario, so every hire is magnified on their P&L as it could potentially lead to the success or failure of their business. If an SMB customer can invest, however, in a solution to automate processes that would have otherwise required a back-office hire, it frees up resources for revenue-generating activities such as sales or marketing. At the same time it could also improve the overall customer service experience, which is critical to compete in today’s market.
By helping SMB users to find ways to operate more efficiently and productively, we can free up resources that will provide them with the edge they’re looking for. That makes it exciting for them and for us.
What trends are you seeing with SMB customers around outsourcing and managed services?
Thomas Jensen: I’ve found that more and more business owners are adopting flexible work schedules and the “work from anywhere, anytime” mentality – especially smaller organizations with few employees. Because of this shift, SMBs are seeking improved mobility, cloud computing and backup/recovery solutions, which sets them up well for a managed services environment. The managed services market among SMBs will continue to grow in the coming years as business owners look for cost-effective ways to reduce risk, increase agility and, to put it simply, lower stress.
Stricklin: We are definitely seeing an upward trend when it comes to outsourcing and managed services in the SMB space. Many businesses, especially upstarts, are trying desperately to keep costs down while building a solid business infrastructure. They’re more willing to outsource the fundamental business processes in order to enable their employees to focus on the revenue drivers within the business. It’s the app mentality. Why spend the time, resources and energy to develop (and/or manage) something if there’s an outsourced business application that can do it for you?
Are there any unique challenges when it comes to selling to the SMB?
Jensen: As SMB customers demand new ways to enhance productivity and mitigate security risks, there is a growing market opportunity for channel partners. The challenge, though, is that SMBs typically do not have the time or resources to invest in complex IT processes. When selling to SMBs, take the extra step to become a strategic adviser to the company. Often, you’ll be working directly with the business owner, as opposed to a dedicated IT professional, who has very general knowledge of their technological needs. Take the time to fully understand their challenges and provide simple solutions that are easy to maintain and require minimal support. Right-size your offerings so that it’s easier for SMBs to understand, deploy and manage a modern IT environment.
Chris Strammiello: Except for the skills and knowledge related to the market niche they serve, a small business owner is typically a generalist when it comes to business operations. Unless your product or service is tied to a specific profession or industry, engage the SMB customer with different language than you would for an enterprise. Don’t use acronyms or technical specifications; instead, talk about the situation a small business owner may be facing and demonstrate how your product or service addresses their issue.
Trevarthen: Because the SMB market is so large and diversified, it is much more effective to support them with value added resellers (VARs), and provide a solution that is customized for their needs. Ensuring these VARs understand the capabilities of any OEMs’ solutions is therefore key to providing support for the SMB market. With technologies, business models and customer requirements changing, ensuring a tight communication path between the channel and the OEMs is critical.
What technologies are bringing the SMB and enterprise closer together?
Snider: It’s not really technology, but with the digitization of so much information, the ability of the SMB to get actionable data and analytics is bridging the gap between SMB and Enterprise.
Stricklin: SaaS and cloud utility models are the technology drivers that are leveling the playing field between the SMB and enterprise. For reasonable monthly fees an SMB can spin up a powerful CRM system (with complete sales forecasting and analytics), automate business processes (expense reporting, accounting), maintain the latest versions of office technology solutions (Office 365), accept mobile payments, deliver an exceptional e-commerce platform and create a professional online presence … all without any IT staff. SMBs can outsource the business headaches while focusing on the areas that drive the business.
“SaaS and cloud utility models are the technology drivers that are leveling the playing field between the SMB and enterprise.”
Trevarthen: Technologies and solutions that have historically been focused on the enterprise are moving down to the SMB. Document management, with its ability to organize and manage the important records of any enterprise, is increasingly adopted in SMBs as scanning and document management solutions have moved to the desktop. In a similar vein, managed print services have increasingly penetrated the SMB market. SMBs are using MPS less for cost reduction and control, but more to be able to get an optimized fleet of devices, which allow them to market themselves effectively and grow as enterprises. Therefore they are deploying distributed color printing within their MPS environments.
Young: We’re in a time where the use of technology has helped to level the playing field between SMB and enterprise organizations. Cloud offerings that can be rented rather than purchased and lower-priced productivity solutions applications have made enterprise-class solutions available to organizations of every size. We refer to that as the democratization of software.
Take, for example, a product like SalesForce.com (SFDC). A CRM was a solution that only larger organizations could cost justify previously, but SFDC changed that with a product that can scale to any size. At Square 9 we used it as a young startup with only three employees. Many years later we continue to use the SFDC platform to automate internal processes for greater efficiency and have integrated it into everything from our commission system and project management platform to our help desk environment and of course our own ECM platform. A tool like SFDC provides the platform for reporting that enables companies of all sizes to be metrics driven, which is critical in this era of “big data.”
CRM is not the only solution that has helped to level the playing field between large and small businesses. While it seems like there is an app for everything, other big difference makers that I can point to include products like Basecamp for project management, Intacct and FinancialForce.com for accounting, and of course WebEx and GoToMeeting. Who would have thought 10 years ago that a small company could compete in a global market delivering not only product demonstrations but also Web-based customer support just as easily as their enterprise-sized counterparts? I would also encourage companies of all sizes to explore some of the new crowdsourcing applications that are available. One of my favorites is 99Designs for crowdsourced graphic design projects.
What would you say are the top IT challenges facing the SMB customer?
Jensen: SMB’s limited budgets are certainly their biggest challenge when it comes to implementing advanced technology solutions. They are well aware that security, mobile device management, and compliance are all crucial aspects of their business, but they still need to control cost and may not be able to justify the investment. Another challenge is the lack of a dedicated IT staff – without those skills in-house, partners should empower them with the appropriate tools they need to increase productivity and meet their business objectives without requiring too much maintenance or operational cost.
Snider: Security and risk management: Ensuring security and privacy of the organization’s systems and data. Data management: How to effectively organize, manage and secure the growing amounts of data within the organization. Mobile and BYOD: The line between personal and business use for company devices is non-existent. An employee bringing their own devices and apps poses a significant security and productivity challenge for IT.
Strammiello: Security is by far the top IT challenge facing the SMB customer. CloudEntr’s 2015 State of SMB Cybersecurity survey found that 77 percent of respondents indicated that their employees are the weakest link in maintaining data and network security. There are simply too many touchpoints throughout business processes that expose sensitive data to security risk. SMBs must gain control of their information by implementing digital capture workflow solutions, safeguarding collaboration processes with PDF software, and securing document output with print management programs.
Stricklin: Investment in analytics tools to help them truly understand their customers, business opportunities and challenges within the business. Managing and maintaining accurate customer data. Unifying employees from a technology/application standpoint and enforcing policy. Mentally putting their trust in the cloud and being willing to embrace the concept of outsourced IT and business infrastructure. Procurement, inventory and e-commerce … and the nightmare that those things are. The SMB is challenged with providing an engaging, easy-to-use e-commerce platform to simplify the consumer experience, while at the same time integrating into their supply chain the systems of multiple vendors, freight carriers, etc. This keeps a lot of SMBs up at night. (Thanks, Amazon.)
Name three differences you encounter when working with the SMBs versus enterprise
Strammiello: Unlike the enterprise, key performance indicators (KPIs) trump ROI as the new metric for determining what IT investments to make. We have found they provide SMBs with specific, actionable insights on business performance and what areas need improvement. With so many vendors fighting for SMB dollars, SMBs will increasingly seek out those that help them understand what KPIs are most relevant for their business and industry, and those that provide credible, specific metrics about how their solutions, not products, affect these KPIs.
SMBs also tend to opt for an incremental, integrated solutions approach. SMBs prefer a Lego-like approach that enables them to acquire only what they need at a given point of time with the ability to easily add-on functionality. They are looking for solutions that allow non-technical users to configure integrations without coding if they understand business integration workflows and requirements.
SMBs have dynamic needs but limited resources. Their buying processes are different and far less formal than the enterprise. We have learned that small businesses in particular often don’t know, or care, whether a problem is financial or operational, marketing- or technology-based. They simply know they have a problem that needs to be fixed quickly and easily.
Trevarthen: Because of their size, SMBs are often able to make decisions faster. However their implementations are often broader and more complex since enterprise tends to implement solutions within a specified scope. Because of the breadth of solutions required by SMBs, it’s critical to have the channel involved for customization of the solution as well as ongoing support.
Have you seen any difference in technology adaptation between the SMB and enterprise (e.g., mobile, cloud, etc.)?
Snider: Definitely. The enterprise space is usually much quicker to adopt new technology, usually because new technology also means expensive and often unproven. SMBs simply cannot afford to take the risks associated with early adoption of technology.
Strammiello: Small and medium-size businesses are completely inundated by paper, and they’re responding to that overload with even more paper due to habit and convenience. Unlike larger enterprises, small business owners don’t realize – or are too busy to contemplate – that paper-based processes waste time and money. SMBs should migrate to digital processes because their customers have come to expect the convenience of digital capabilities, their employees would be much more productive and resourceful, and they will reduce the security risk of printed information falling into the wrong hands. Channel partners have a huge opportunity to bring in new revenue by encouraging SMB customers to move away from paper and integrate digital workflows into their existing business processes.
Also, cloud adoption is expected to increase through 2018 for both SMB and enterprise. The data that we have found shows very little difference in the percentages for those businesses that plan to increase their use of cloud. The number one benefit of cloud adoption in SMB is the ability to add new users without difficulty. We are still seeing security as the number one reason SMBs are not moving to cloud.
SMBs continued to expand their use of cloud and mobile resources while strengthening traditional on-premise resources. Security emerged as an especially important investment area for SMBs.
Young: I personally feel that the difference in technology adaptation has more to do with the culture of an organization’s IT department and the nature of their industry than their revenue or employee count. We’ve seen both SMB and Fortune 500 organizations embrace the cloud fully with its reduced costs in IT infrastructure and management. At the same time we’ve seen similar sized organizations in a different industry absolutely reject it. One thing I do see consistently is a difference in the mobile policies of larger organization and financial organizations in particular. It’s more and more common to see companies taking great steps to lock down their mobility platforms and limit functionality. That means no texts, limited Web and even disabled cameras in many cases.
As a developer of content management solutions we find the question of security largely drives the decision over whether to deploy a cloud or mobility platform. I listened recently to an interview with Michael Daniel, the White House cybersecurity czar, who stated that there was simply no way to protect against a security breach in any environment. He went on to say that short of paying cash for everything and essentially going off the grid, there was no way to protect yourself 100 percent against potential hackers and that you could really only mitigate this through risk assessment.
If your documents are highly sensitive or contain confidential information, the idea of storing them in the cloud is certainly something that can give you pause. As a result, many organizations are deploying cloud based document solutions on a departmental basis where risk can be assessed more carefully on an application to application basis.
This article originally appeared in the October 2015 issue of The Imaging Channel.