Gartner defines small and medium-sized businesses (SMB) as those businesses with less than 1,000 employees. According to Wikipedia, a vertical market is “ … a market in which vendors offer goods and services specific to an industry, trade, profession, or other group of customers with specialized needs.” Recent surveys indicate that approaching SMBs in vertical markets may create a good recipe for imaging channel sales opportunities.
The U.S. Census Bureau reports that almost 8 million business establishments exist, employing over 132 million workers. Almost all of those establishments — 99% — have less than 1,000 employees and employ 84% of all workers. Now, to be fair, many of those SMBs have less than five employees (about 54% of all business establishments). However, those that have five to 999 employees represent 45% of all businesses in the country and employ 79% of the workforce. That means SMBs that have five or more employees provide a particularly good opportunity for imaging channel dealers in the potential number of establishments that may need their goods and services. There is also the opportunity to contribute to improving the productivity of a large swath of the U.S. worker population when they use the technologies and services that imaging channel dealers provide their employers.
A recent survey from SMB Group shows 72% of SMBs are optimistic about business prospects for this year and 40% of SMBs with 100+ employees made significant changes to technology in the wake of COVID-19. For imaging channel dealers, there remains a large opportunity in providing solutions around strong data security, analytics, reporting, dashboards, and integrating solutions as businesses build back during the year and look to maximize employee productivity and business returns.
In the annual Imaging Channel Market Trends Survey, 98% of dealers said SMB size businesses are included in those businesses they sell to (2% said they only sell to businesses with 1,000 employees or more). However, examining the survey responses further shows that 56% of dealers exclusively sell to businesses with less than 1,000 employees. SMBs are a major portion of the imaging channel business and, for most dealers, the business that keeps the enterprise moving forward.
Dealers also reported that the top five vertical markets that provided the most business were, in rank order (excluding government): Healthcare, education, manufacturing, legal services, and finance and banking. The full chart is below:
On average, 62% of dealers said business in these vertical markets increased or stayed the same during 2020. Efforts in marketing and selling to these vertical markets helped these dealers weather the storm of 2020 better than others. Interestingly, 60% of the dealers identifying one of these vertical markets as providing the most business were those dealers that also reported they exclusively sell to businesses with under 1,000 employees – by definition, SMBs in these vertical markets.
Looking again at census data, these five vertical markets represent a quarter of all establishments in the U.S. and more than one-third of all workers employed. In each vertical market at least 99% of all establishments are SMB in size. Additionally, except for the education market, these SMB-size establishments represent 80% or more of the employees that work in each vertical market (60% of education vertical market employees work in SMB-size establishments).
What all this data seems to imply is that while it may be tempting to use a large account focus when approaching vertical marketing and sales efforts, most vertical market business is within SMB size businesses. Applications used in large hospitals, education campuses, or legal firms can be adapted to use in smaller establishments with less than 1,000 employee establishments in the same vertical market. With SMBs (including those in vertical markets) being optimistic about business prospects for 2021, dealers focusing on SMBs in vertical markets will keep finding a good recipe for sales success and growth for the year.