Businesses selling services to SMBs — a category we call “B2SMB” — currently bring in $500 billion a year. But major changes can be anticipated as the market shifts away from media towards cloud based services, artificial intelligence, marketing automation and location marketing.
This cluster of tech movements represent real opportunities to help SMBs target and engage customers, become more efficient and integrate their front-office and back-office operations.
The new technologies also represent a likely shift in marketing and operating dollars. While they complement advertising and make it more focused, SMBs will rely more on martech than adtech for many of the things they need to manage and grow their business (i.e. lead generation, loyalty and fulfillment).
There is ample evidence that the shift in B2SMB is already occurring. Preliminary Tech Adoptive Index data from the Local Search Association finds that 22% of SMBs are using marketing and ad solutions. Thirty-two percent subscribe to CRM solutions; 25% subscribe to payroll and other human resource solutions; 21% subscribe to finance and operations; and 19% subscribe to supply chain services.
How will companies that sell to SMBs adjust their strategies to incorporate adtech and martech solutions while leveraging their existing sales channel advantages? One way is to move towards comprehensive “platforms,” which lower the risk of churn, complement existing services, and represent revenue growth.
Platforms are being developed by many of the key players in the game from every category: media, yellow pages, domains, broadband, wifi, websites, web hosting and transactions/payment processing. Some of these are built in-house. Others are purchased or partnered.
DexYP, for instance, brings 700,000 SMB accounts to the table — mostly from its traditional yellow pages business. The company is now seeking to extend its presence via its THRYV platform, which includes customer management, text and email marketing, appointment scheduling and social media promotions channels.
Many SMB specialists are also branching out to provide broader solutions. GoDaddy has been a pioneer. While initially focused on domains, it has been pushing a wide range of SMB solutions for many years, including websites, email, marketing, online commerce and bookkeeping. By the end of 2016, domain registration represented just half of the company’s revenue.
Comcast Business has also been a pioneer. Initially selling Internet and video access to businesses, Comcast now works with over two million businesses on a broad range of integrated adtech and martech solutions.
Even narrowly-based utilities have gotten into the platform game. DocuSign is providing complete data analytics for customers of its online signature services (realtors, etc.) Another example is Concur, which is branching out beyond its traditional SMB invoice service and is providing a wide variety of services.
Who wins and who loses in this shift depends on many factors. These include:
1. Volume of SMBs. Sheer numbers make platforms attractive. GoDaddy, for instance, has 16.8 million customers.
2. Engagement with SMBs. How often are reps in touch?
3. Adjacencies with core services. Some vertical services make more sense with certain companies than others.
4. Are there savings in the platform, or will it be perceived as just a big upsell?
5. Will the platform provide unique values not associated with others?
In recent discussions with industry leaders that are appearing at The B2SMB Summit in October, we’ve put together a short list of six big themes that will really matter in this space.
Build trust and add value
“We are mixing SMB insights, actionable tips, content marketing and website analytics for SMBs. The brands that do the best job of building trust and adding value early in that relationship will ultimately win in the SMB segment.”
— Ryan Wilson, Agency Integration Leader, LinkedIn,
Give it to them “their” way
“Our customers’ needs differ depending on their region, lifecycle stage and vertical. The most powerful service to one small business owner could be completely useless to another.”
— Steven Aldrich, CPO, GoDaddy
Make it easier
“SMBs are very focused on ease-of-use and ease-of-purchase. Everything we’ve done is built around making it easier, and producing tangible results. They really like that we can offer a bundled offer with their Internet.”
— Jenn Allen, Go to Market Leader, Cisco
Help them be self sufficient
“It’s about the consumerization of IT. SMBs are all used to having their own iPhones. They want to be self sufficient.”
— Sandi Thomas, VP, Infor
“In the same ways that Google built AdSense for search…. help companies more effectively highlight their products and services.”
— Scott Gifis, VP & Managing Director, North America, AdRoll
Efficiently communicate your message
“You only have two minutes to help them navigate who you are, and why you are better. And you need them to come back again and again before they do business with you. A good prospect will come back three times.”
— Mark Canon, CEO, Boomtime
The B2SMB Summit takes place Oct. 3-4 in Chicago. The speaker list includes more than 30 industry leaders from Dell, GoDaddy, Office Depot, DexYP, Web.com, Microsoft, Comcast Business, Yext, DocuSign, LinkedIn, Cisco, Business.com, Infor, Concur, Web.com, 1&1, Indeed, Cargo and Buzzboard. Sign up now for the event. My discount code, “PeterVIP,” gives you $199 off.
This Post appeared this week in Streetfight. We reprint it with permission