‘Local Market Paradox’: Consumer Tech Changing, SMB Issues Persist


I recently spent about eight hours locked in a room with a bunch of local/SMB market veterans talking about what’s happening in the “local market.” That means different things depending on the context, but here it meant consumers and SMB marketers.

What was fascinating to me about the discussion, among other things, was the contrast that emerged between fairly dramatic changes on the consumer-technology side and the fact that the issues on the SMB side seemed almost the same as a decade ago.

Overall here are the big (or continuing) shifts regarding consumer behavior and related technology:

  • Further consumer migration to mobile (search)
  • Concentration of traffic + attention in the hands of a smaller number of consumer-facing platforms and companies
  • Rise of location analytics/location intelligence (with near-term enterprise implications)
  • Voice search
  • Virtual assistants/AI/Messaging and consumer engagement with chatbots
  • New hardware devices and form factors (e.g., smart speakers, connected cars)
  • Mixed reality (and related hardware)

However on the SMB2B side the discussion was very familiar:

  • SMBs are overwhelmed by market complexity
  • The market has too many vendors/products that create confusion
  • SMBs don’t know whom to trust and they’ve been repeatedly burned by false expectations
  • SMBs want assurances of performance but don’t pay attention to ROI metrics
  • Sales reps can’t effectively sell products to the SMB market
  • Reps are still selling products and services that are often a mismatch for customers
  • A radically new sales approach is required
  • Self-service (still) won’t work for most of the market
  • SMBs aren’t keeping pace with changes in consumer behavior

And so on. Local publishers and those focused on selling services to SMBs are in some cases transitioning to different approaches (see Dex Thryv) and technology/automation may help with margins but the core (sales, acquisition and retention) issues seem to be persistent and all-too-familiar.

So has anything on the B2B side actually changed? Fundamentally, local business owners don’t need to be “sold” on the value of digital anymore. There’s also a somewhat greater degree of sophistication and savvy around digital solutions among business owners. So we’ve moved from “why” to “how.” But the “why” problem still exists for some products or individual channels.

In addition, as indicated, the solution set is shifting — though not necessarily getting simpler. Some vendors and sales channels are moving away from offering pure new customer and traffic acquisition and adding or substituting retention marketing and back office solutions. Some of that is driven by a desire for greater margins and valuations. There are also a broader range of companies now offering competing solutions to SMBs.

Beyond this — and this is very real — machine learning and automation will play a increasingly significant role in SMB marketing programs. Over time machines and automation will replace humans for most SMB (and enterprise) marketing tasks, except perhaps creative, and may radically reshape how humans are deployed (or not as the case may be). It may also expand the pool of those capable of doing effective self service.

Many of these trends are being captured and tracked by LSA’s new Tech Adoption Index research.

Stepping back, the short version of the big picture is this: we’ve got is a consumer market in dramatic and rapid transition, an SMB market that is moving much more slowly and unevenly and a large number of vendors and service providers — though certainly not all — that are are trying to bridge the two but concerned chiefly with margins and valuations and not necessarily the well-being and success of local businesses.

What are your thoughts on all this?

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