By Robert Craven, Managing Director of The Directors Centre
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 telephone 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.