‘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?

4 Responses to “‘Local Market Paradox’: Consumer Tech Changing, SMB Issues Persist”

  1. Robert says:

    Having worked in this field for the better part of 15 years I am astounded by the pace of change. Most of the SMB’s I deal with are getting more and more clueless about what is going on in the digital world. Every business I talk to has disruptors! In some situations it is scary but in others the opportunities are profound if we can identify them correctly.

    My sales approach has to change with this new world and it is challenging after having sold a certain way for so many years. My new approach is become a trusted advisor to my SMB’s and to hopefully become a strategic partner with them. Everything I sell is commoditized now so if I can’t become a strategic partner then I am toast. Scary but interesting times.

  2. Greg Sterling says:

    Agree. But a key question is: how do you establish trust?

  3. Interesting article. There’s no surprise when it comes to consumer transition and SMB confusion, especially with the myriad of tools and services available today. This growth is reminiscent of the early days of recruitment technology. The thought of uploading a resume online to find a job, or applying to a job posted online was foreign and down right odd. Leave it to to create the paradigm swift that forever changed the job posting and the job searching landscape.

    Another dynamic spawned by the HR technology boom of the early 2000’s was the concept of outsourcing, and the creation of “RPO”, or specifically recruitment process outsourcing. I offer the RPO example because it would not be surprising at all to see a “POP” or Paid On Performance service model – created specifically for the SMB sector.

    Small business owners don’t often have the time, skill sets or resources to learn and manage marketing and sales tools, required to drive their process. A marketing and sales outsourced model (paid for on performance) would have a vendor manage the appropriate blend of services required and serviced on behalf of the SMB. The vendor’s sole focus would be to generate the required level of consumer leads needed on a monthly, weekly, daily or even real time basis. This model would be embraced and successful because at the end of most any day, the small business owner only cares about collecting ready and eager consumers in need of their service or product. The consumer in turn cares about speed and efficiency in finding a good (local) service at a fair price.

    Ultimately technology will dictate what services and platforms will flourish, or survive the onslaught of new options that become available to SMBs. And just as occurred in the HR technology space, I predict that there will be a “roll up” strategy driven by key industry leaders that will acquire the best of breed tools and services – all managed and offered as a POP model.

    Thryv was mentioned in your article, and In full disclosure, Thryv is the platform that I’ve embraced and sell to SMBs. I joined Dex Media over a year ago after I saw the writing on the wall, in relation to the developing integrated marketing automation systems landscape, as a benefit to SMBs. I was also an industry leader within focused on HR Technology development, and boy, do I smell a very similar scent in the air!

    Keep your eyes on Thryv, and certainly the new DEX.YP – the landscape is changing!

  4. Greg Sterling says:

    I think the market is complicated. There’s demand for simplicity, usability and efficiency. There’s also price sensitivity. There are open questions about go-to-market and channel strategies. It will be difficult to do everything well. Build vs. buy vs. partner is hard. Often technology can’t be integrated and acquisitions fail. Partnerships also are sometimes difficult because of a lack of back-end integration and the inability of the channel partner to sell the product effectively. “App marketplaces” can be messy and incoherent. And building is difficult if you’re not an engineering-driven company. The market is definitely going in the direction of Thryv but execution and smart decision-making around product scope will be critical.

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