What are the highs and lows of working with the SMB customer? 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, and not surprisingly, they had some interesting insight on what makes the SMB tick.
What is one of the most important lessons you’ve learned from working with the SMB?
Matt Chretien: They are focused on the tactical realities of growing their business with many demands on their time. These pressures create a mindset and culture with low to no tolerance of complexity of any kind. If a simple, clear, and quick time-to-value isn’t apparent in a five-minute conversation, nothing happens.
Jim D’Emidio: Many SMB customers are similar to dealers: Some among them are family-owned businesses, and many times, relationships and who they’re doing business with is as important as price. These SMB customers like doing business with local companies that have roots in the community. They tend to look for value, not just lowest cost. These SMB customers are not always on the cutting edge of technology, but they will adapt new technology as it becomes commonplace in the business community. BTA dealers do very well with SMB customers because of the relationships they form.
Brandon Gross: Among the many lessons I’ve learned in working with SMB clients, not underestimating their potential has been the most valuable. Time and time again, I’ve revisited SMB accounts to learn that they have doubled or tripled in size and outgrown their current solution. This means more products, more sales, more revenue, and the consistent opportunity to consult as a trusted partner.
Jeanne Hopkins: That they have way too much to do and are inundated with requests for time – “just 10 minutes” — and no one has lots of “just 10 minutes.” SMB leaders are always interested in growing and learning new things. So, it is a dilemma – how do you learn about new tools, technologies, systems and workflows unless you take those calls?
Mike Johnson: One of the most valuable lessons we’ve learned is that it is a chance for us to have leverage in the marketplace through our partners. Our partners have the sales resources and “feet on the street” to reach more opportunities and participate with the Lexmark brand than we could directly. You have to have partners to reach those clients. We’ve learned that our partners have excellent relationships with the SMB clients sometimes lasting more than 10 or 15 years. We see that and it is something that is very compelling to us.
Matt Smith: No question that SMB customers live up to their reputation of responsive, nimble and scrappy organizations, but the most important lesson I have learned in working with them is that they work together as a seamless organization when it comes to learning. They love to talk, share best practices, share pricing, share what didn’t work, share how they won customers and lost customers, and how they reinvented themselves. You need to treat each SMB as a potential entry point to a large organization that is bigger than the largest enterprise account.
What new technologies do you see being adopted by the SMB customer?
Chretien: We are seeing more and more interest in cloud technologies, particularly cloud document management solutions. The cost of maintaining your own infrastructure combined with the SMB’s lack of internal IT competency is accelerating the trend.
D’Emidio: Although SMB customers are generally not early adopters to technology, they are adopting technology at a rapid pace that will streamline their businesses or reduce costs. Dealers have found additional revenue by providing services like managed print services, managed document services and managed network services. Many dealers have been very successful in adding these services to sell to SMB customers, and it is important that dealers have a strong services offering to maintain the loyalty of their hardware customers. It is also important that dealers continue offering relevant and unique solutions to their customers. As copy and print become less important to the SMB customer, dealers need to have additional offerings to increase revenue and margin. Technologies such as IT services, 3-D printing, color label printing and security monitoring services will help dealers expand their offerings to SMB customers.
Steve Feldstein: Through conversations with our customers and channel partners, we understand SMB customers are concerned about mobility and security. Given the increased use of tablets and smartphones among employees, cloud and mobile enablement is increasingly important to SMB IT decision makers as they want to support employees wherever they are. Print devices with mobile-friendly features such as “print-from” and “scan-to” capabilities are important features needed to help keep mobile employees productive.
To support workflow in the SMB environment, which can still be very paper-intensive, businesses are adopting multifunctional devices that have solution-integration and business-class functions. More SMBs need to interface with electronic workflow systems, such as Electronic Health Records (EHR) solutions, and multifunction devices serve as critical input/output posts in the workflow process. As such, we see increased adoption of print/scan/copy/fax devices and solutions that enable end users to share information quickly, securely and cost-effectively.
Interestingly, SMBs also look for eco-friendly office technology. Device features, such as duplex printing, Energy Star-rated devices, and high-capacity consumables are in high demand; deep sleep and auto power-off modes also help reduce energy consumption when the device is not in use.
Hopkins: The concept of a CRM system is one that is needed … needed in order to communicate to existing clients or customers as well as prospects. Being consistent in content creation and developing a cadence is so critical.
Smith: SMBs adopt technology like consumers: they want their technology to match their personalities and unique characteristics. This is actually why I believe Samsung is so well aligned to support SMBs as we believe in open architecture and ecosystem partners that customize our hardware to match the needs of the market. With our Android tablet interface, my 16- and 14-year-old children can build an app or create a custom workflow to match their desires. This is the power of the Android open ecosystem that aligns with the responsive, nimble and scrappy attitudes of the SMB customers.
Are there any unique challenges when it comes to selling to the SMB?
Chretien: Low appetite for capital investments, no patience with long sales cycles, limited change management or “process” maturity and difficulty in “stepping off the hamster wheel” and providing true mindshare to engage in a meaningful conversation about their business strategy, goals, and challenges.
Gross: A challenge in doing business with SMB clients is showing value. Will SMB clients spend money? Yes. However, they are typically more in tune with how much they are spending versus their enterprise competitors. ROI and overall value are key.
Hopkins: Time. A lack of time.
Johnson: How do you reach the customer? That’s really the unique challenge. How do we reach the customer through our partners? We do a lot of work from a solutions perspective. We’ve focused a lot on leveraging a mobile platform that our partners can use so they can better understand the value that we can bring, and then communicate that value to the SMB customer. It starts the conversation — we want to make sure we are training the reps to ask the right questions.
The best solutions that Lexmark has created have started right at the customer. They don’t start in a room in Lexington – they start at the customer level. We’ve really tried to learn how to apply our resources best to deliver value – that’s where the solution starts.
The OEM/provider/hardware landscape is going through drastic changes — what effect do you think that will have on the SMB customer?
Chretien: I think SMB buyers will continue to be presented with solutions that offer ever-increasing business value, with simple and clear investment models, i.e., a per-user, a la carte managed service approach that continue to make it easier and easier for them to focus on growing their business and jettison the rest to a trusted partner.
Feldstein: Quality, reliable products and a strategy to support the end user before, during, and after the sale is now more critical than ever. SMBs are also demanding end-to-end solutions that can be customized for the workgroup and the business. Reliability, expandability, and product support will become more significant factors in the decision-making process.
Increased reseller training and support through authorized partner programs are becoming more important, as well as extended warranties and discounts of genuine supplies.
SMB customers are looking to OEM/provider/hardware manufacturers for efficient workflow solutions. This includes scan-to-cloud/print-from-cloud capability, smart MFPs with solution integration (including cloud apps), and the ability to customize device operations to meet business-specific needs. For SMBs in the K-12 education vertical, compatibility with student assessment technologies such as Scantron, Global Scholar, Eduphoria, and EduSoft is critical. Similarly, hospitals running electronic health record (EHR) systems such as Cerner, Epic and Meditech need compatible devices for printing and scanning.
Hopkins: More focus on a single vendor to support multiple needs.
Smith: The market is changing, but not as fast as everyone likes to believe. You don’t have to be bleeding edge, but you should be a fast follower. My direction to SMBs, and to any customer, is to NOT lock yourself into anything for more than three years. You should also be willing to spend more to get a nimble solution, one that will adapt to a changing market and landscape. From a Samsung perspective, it is easy to say, stick with the largest companies with the largest balance sheet, which is self-serving. I think it is more important to pick manufacturers who are able to adjust with the market at record speed. Adjusting to changing markets should be the No. 1 attribute that customers of all sizes should consider.
What are the main differences you encounter when working with the SMBs versus enterprise customers?
Chretien: Human and financial capital, IT competency, experience, infrastructure, process maturity and change-management abilities.
Hopkins: Faster decision making due to fewer people making [the decisions], but risk-averse due to the expense.
Johnson: The SMB customers have less scale, but you also see less politics generally with the smaller customers; they move with more speed and they are more willing to take risks. Usually we can get to the issues that are holding the businesses back with the SMB customer a lot quicker versus the enterprise customer. A lot of the best practices that we have developed have been driven by our SMB customers and then passed along to our enterprise customers because our SMB customers are willing to participate in pilots and take more risks. Their participation allows us to have more intimate knowledge about their businesses versus some enterprise customers.
Smith: The main differences that we have encountered when working with SMBs versus enterprise customers are in experiencing cutting-edge technology. As a company that likes to bring new technology that is disruptive to the market, it needs to be experienced more than explained. I can explain about a tablet interface on a new copier that utilizes the power of the Android ecosystem or harnesses the power of the mobile phone to a mobile workforce, but the real power comes when an end user walks up to the machine. They aren’t sure how to use it for the first 10 minutes, but then the magic happens when they realize it isn’t just a copier. I have seen the moment happen over and over with a simple question that they ask me: “But can it do X?” Once they realize the answer is yes, they follow up with “well, what about Y and Z?” At that moment, they realize the power of a disruptive product. The issue is that it is much harder to give thousands of SMBs this experience than it is with enterprise customers that are centralized with structured hierarchy.
What would you say are the top IT challenges facing the SMB customer?
Chretien: Security and compliance remain at the forefront for most SMB owners; however, maintaining the infrastructure to support the business while staying within the budget is always challenging.
D’Emidio: The difficulty for both dealer and SMB customers is determining which direction is the best for the future. Many SMB customers do not have full-time IT or CIO personnel. Therefore, their IT strategy is based on a variety of initiatives implemented by the owner, or part-time IT resources. The SMB customer does not have the IT understanding to develop a strategic IT implementation or future direction. Dealers that can offer IT support and virtual CIO can help the SMB customer develop and implement a future IT strategy. Dealers can do this by partnering, building or buying this IT knowledge. New technologies, such as cloud-based IT services, can also help dealers to offer additional IT services. The future of SMB IT services will be hosted in the cloud: SMB IT services will be offered as a monthly recurring revenue utility model through the dealer, and dealers will manage print and copy at the SMB location. All other IT services will be cloud-based and the SMB customer will have mobile and thin client products.
Gross: Sufficient IT infrastructure and resources are a common challenge with SMB clients. For our industry especially, everything we sell requires connectivity. Coaching the SMB client through the process of expanding their network infrastructure to accommodate our solutions isn’t uncommon. Working with outsourced IT is also common. Patience goes a long way here.
Feldstein: Budget constraints and flexibility are the top challenges today. Decision makers are operating on tight IT budgets – which are often flat from year to year. This requires the flexibility to explore and unlock the underutilized value in solutions across the network. In many cases, this can involve integrating new multipurpose/multifunctional devices with existing IT infrastructure and better evaluating total cost of ownership of MFPs and printers over the life of the device.
Equally important is network security. IT professionals are always looking to deploy the highest levels of security to ensure that information is only seen or accessed by the people intended. Devices that offer integrated NFC card readers and/or support smart card technology provide walk-up authorization or user authentication. Locking down network access points and deploying secure release functionality for print jobs and access to other device functions supports enhanced security efforts. Also, network user authentication also protects against unauthorized access to the device to help protect information and help ensure regulatory compliance.
Hopkins: Understanding the need for security and data backup.
What trends are you seeing with SMB customers?
Chretien: Migration to cloud and willingness to acquire new service models if they are simple to consume financially and operationally, and are worry-free and from a partner they trust.
Feldstein: There is an urgent need to continue innovating, and keeping up with the competition, despite flat budgets. SMBs are harnessing business intelligence and analytics, driving more efficiency into the business. Faster connectivity, mobility, and cloud-based solutions are increasingly becoming key enablers for these initiatives.
The influx of millennials in the workplace has also changed printing needs. While they are less likely to print some documents for environmental reasons, millennials are more likely to print critical information for records such as legal, human resources, and sales content.
To meet these needs, SMBs are seeking cost efficient solutions to share and store data, rapidly and cost-effectively via mobile and cloud applications. This includes faster, more productive A4 size printers and MFPs that securely improve workforce productivity and promote collaboration.
Johnson: We see SMB customers seeking a deeper relationship with their partners. They are asking their partners to deliver more value. We are working closely with our partners to see how we can help them move from commodity transactions to working with the lines of business at the customers, where we can deliver more value. We want to ensure that we are giving our partners the capability to have these conversations and deliver solutions in those lines of business.
This article originally appeared in the June 2016 issue of The Imaging Channel.